Trump-Linked Crypto Venture Under Fire as House Launches High-Stakes Investigation

In a dramatic escalation of political and financial scrutiny, World Liberty Financial—the cryptocurrency venture tied to former President Donald Trump—now faces a formal congressional investigation after bombshell reports revealed a $500 million stake from UAE-linked investors.

The controversy erupted following a Wall Street Journal exposé detailing how, just days before Trump’s inauguration, “lieutenants to an Abu Dhabi royal” secretly inked a deal to purchase a 49% stake in the fledgling crypto platform for half a billion dollars. Now, Rep. Ro Khanna, the ranking Democrat on the House Select Committee on the Chinese Communist Party, has launched a full-scale probe into what he calls a potential “scandal” with serious national security implications.

The Letter That Shook Crypto Markets

On Wednesday, Khanna fired off a pointed letter to World Liberty co-founder Zach Witkoff, demanding ownership records, payment details, and internal communications tied to the reported deal. The California congressman didn’t mince words, arguing that the reported investment raises explosive questions about conflicts of interest, national security vulnerabilities, and whether U.S. technology policy was manipulated to benefit foreign capital with strategic interests.

“The reported investment may have resulted in significant changes to U.S. Government policies designed to prevent the diversion of advanced artificial intelligence chips and related computing capabilities to the People’s Republic of China,” Khanna wrote, drawing a direct line between the crypto deal and America’s most sensitive technological assets.

Trump’s Denial and the Family Business Defense

Facing mounting pressure, President Trump pushed back on Monday, claiming he had no knowledge of the transaction. Speaking to reporters, he stated he was unaware of the deal and emphasized that his sons and other family members manage the business and receive investments from various parties.

“I had no knowledge of that transaction,” Trump told reporters. “My sons handle the business. They get investments from many different people.”

The UAE Connection: Sheikh Tahnoon and Strategic Influence

According to the Journal account cited in Khanna’s letter, the agreement was signed by Eric Trump days before the inauguration. The investor group was described as linked to Sheikh Tahnoon bin Zayed Al Nahyan, the UAE national security adviser whose influence extends deep into both regional politics and global finance.

Two senior figures connected to Sheikh Tahnoon’s network later joined World Liberty’s board, raising additional red flags about the depth of UAE influence over the Trump-linked venture.

USD1 Stablecoin: The Financial Engine Behind the Controversy

Khanna’s investigation goes beyond the initial stake, zeroing in on World Liberty’s USD1 stablecoin and its role in facilitating a $2 billion investment into Binance by MGX, another entity tied to Sheikh Tahnoon. The congressman argues that this transaction “helped catapult USD1 into one of the world’s largest stablecoins,” potentially generating massive fees and revenues for the project and its shareholders.

“The use of USD1 to facilitate this transaction represents a textbook case of how politically connected crypto ventures can leverage their influence for financial gain,” Khanna’s letter states.

The Binance Pardon Connection

Perhaps most controversially, Khanna connected the Binance investment to later policy developments, including chip export decisions and President Trump’s controversial pardon of Binance founder Changpeng Zhao. The congressman cited a former pardon attorney who declared, “The influence that money played in securing this pardon is unprecedented. The self-dealing aspect of the pardon in terms of the benefit that it conferred on President Trump, and his family, and people in his inner circle is also unprecedented.”

This connection between the UAE investment, the Binance deal, and the presidential pardon forms the backbone of Khanna’s argument that World Liberty Financial represents something far more serious than typical political business entanglements.

Constitutional Crisis or Business as Usual?

Khanna framed the overall picture as more than political optics. “Taken together, these arrangements are not just a scandal, but may even represent a violation of multiple laws and the United States Constitution,” he wrote, specifically citing conflict-of-interest rules and the Constitution’s Foreign Emoluments Clause.

The congressman’s warning about the stakes couldn’t be clearer: “Congress will not be supine amid this scandal and its unmistakable implications on our national security.”

The Document Demand: March 1 Deadline Looms

Khanna has given World Liberty until March 1, 2026, to produce a comprehensive set of documents including:

• Agreements tied to the reported 49% stake
• Payment flows and financial records
• Communications with UAE-linked representatives
• Board appointment documentation
• Due diligence materials
• Records tied to USD1 stablecoin’s role in the Binance transaction
• Discussions around export controls and US policy toward the UAE
• Communications related to President Trump’s decision to pardon Zhao

National Security at the Crossroads

The probe lands at a moment when stablecoins sit closer to the center of market structure debates, and when politically connected crypto ventures face sharper questions about ownership, governance, and access to sensitive technologies.

Khanna’s investigation specifically highlights concerns about the potential diversion of advanced AI chips to China through third countries, linking the UAE investment to broader strategic competition between the United States and the People’s Republic of China.

Crypto Industry Reacts: Shock and Speculation

The cryptocurrency industry has responded with a mixture of shock and speculation. Some industry veterans see the investigation as a necessary check on the growing influence of politically connected ventures, while others worry about the broader implications for crypto innovation and investment in the United States.

“This isn’t just about one company or one family,” said one prominent crypto attorney who requested anonymity. “This is about whether we’re going to allow strategic adversaries to use our own financial innovation against us.”

The Political Calculus

The timing of Khanna’s investigation is particularly noteworthy, coming as Democrats seek to highlight potential conflicts of interest and corruption within the Trump orbit. The investigation also serves as a test case for how aggressively Congress will police the intersection of cryptocurrency, foreign investment, and national security.

What’s Next: Legal and Political Battle Ahead

As the March 1 deadline approaches, World Liberty Financial faces a critical decision: comply fully with Khanna’s demands and potentially expose damaging information, or resist and risk escalating the political and legal battle.

Legal experts suggest the company may attempt to invoke various privileges or challenge the scope of the investigation, but the political pressure is likely to intensify regardless of their response.

The Broader Implications for Crypto Regulation

This investigation could have far-reaching implications for the cryptocurrency industry as a whole. If Khanna’s probe uncovers evidence of wrongdoing, it could accelerate calls for stricter regulation of politically connected crypto ventures and greater scrutiny of foreign investment in American blockchain projects.

Conversely, if the investigation fails to produce substantial evidence of wrongdoing, it could embolden crypto advocates who argue that political opposition to the industry is driving excessive scrutiny.

Tags:

WorldLibertyFinancial #TrumpCrypto #UAEInvestment #CongressionalInvestigation #RoKhanna #CryptoScandal #NationalSecurity #Stablecoin #Binance #PoliticalCorruption #ForeignEmoluments #AI Chips #ExportControls #CryptoRegulation #BlockchainPolitics

Viral Sentences:

“This is about public trust and transparency.” – Ro Khanna

“The influence that money played in securing this pardon is unprecedented.” – Former Pardon Attorney

“Congress will not be supine amid this scandal and its unmistakable implications on our national security.” – Ro Khanna

“I had no knowledge of that transaction. My sons handle the business.” – Donald Trump

“This isn’t just about one company or one family. This is about whether we’re going to allow strategic adversaries to use our own financial innovation against us.” – Crypto Attorney

“The use of USD1 to facilitate this transaction represents a textbook case of how politically connected crypto ventures can leverage their influence for financial gain.” – Congressional Letter

“Taken together, these arrangements are not just a scandal, but may even represent a violation of multiple laws and the United States Constitution.” – Ro Khanna

“The reported investment may have resulted in significant changes to U.S. Government policies designed to prevent the diversion of advanced artificial intelligence chips and related computing capabilities to the People’s Republic of China.” – Ro Khanna

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