tl;dr
World Liberty Financial (WLFI), a decentralized finance project endorsed by President Donald Trump, has proposed a test to distribute a small amount of its new USD1 stablecoin to all eligible WLFI token holders. The purpose is to validate the airdrop system and thank early supporters. The proposal o...
World Liberty Financial (WLFI), a decentralized finance project endorsed by President Donald Trump, has proposed a test to distribute a small amount of its new USD1 stablecoin to all eligible WLFI token holders. The purpose is to validate the airdrop system and thank early supporters. The proposal outlines plans for community discussion, finalizing airdrop details, governance voting, and public announcement. The firm's political ties have sparked controversy, with concerns raised about Trump's financial stake and regulatory integrity. Lawmakers have raised alarms, and tensions have escalated, with demands for regulatory records.
Since WLFI launched USD1 in late March, just as Congress began debating the bipartisan STABLE Act, lawmakers have sounded alarms over Trump’s financial stake in the project, warning it could compromise the integrity of the regulation. WLFI, launched last September, has already raised $550 million through token sales, with $390 million reportedly paid out to Trump family-linked entity DT Marks DEFI LLC. The firm’s stablecoin USD1 is collateralized by U.S. Treasuries and managed by custodian BitGo, but the platform’s governance token remains non-transferable, adding to concerns over transparency and decentralization.
Tensions exploded during a recent House Financial Services Committee markup of the bill as Democrats pushed for amendments that would bar sitting presidents, cabinet members, and their families from launching stablecoins while in office. Meanwhile last week, Sen. Elizabeth Warren (D-MA) and Rep. Maxine Waters (D-CA) demanded the U.S. Securities and Exchange commission (SEC) to turn over all internal records related to WLFI, citing potential “regulatory favoritism” and the agency’s decision to pause enforcement actions, including one involving WLFI investor and Tron founder Justin Sun.