A new cryptocurrency venture involving U.S. President-elect Donald Trump and his Middle East envoy, billionaire Steve Witkoff, has caused concerns due to its partnership with a platform associated with criminal activity and Iran-backed militant groups Hamas and Hezbollah. World Liberty Financial Inc, established by the Witkoff family shortly before the U.S. election, has raised ethical and conflict of interest issues, according to six U.S. government ethics experts. One major worry is the venture’s collaboration with the Tron cryptocurrency platform, which is known for facilitating faster and cheaper transactions compared to Bitcoin. Tron has been identified as a preferred method for crypto transfers by organizations labeled as terrorist groups by various countries.
Tron recently announced a $30 million investment in World Liberty, with its founder Justin Sun set to advise the venture alongside Trump and Witkoff. Concerns have been raised about Tron’s utilization by militant groups, with Israeli authorities linking Tron wallets to Hamas and Hezbollah. Despite efforts to address illicit activities on its network, Tron has attracted both legal users and those with nefarious intentions. The company asserts that it has implemented measures to mitigate risks of illicit activities.
There have been seizures of Tron wallets by Israeli security services, with instances of funds being linked to terrorist organizations. However, independent verification of these claims could not be obtained. The U.S. Treasury Department has also taken action against Tron wallets associated with groups raising money for Hamas. The industry faces challenges in preventing criminal exploitation, with Eric Trump acknowledging the need for vigilant oversight.
The U.S. government has taken action against a money changer based in Lebanon for providing Hezbollah officials with cryptocurrency accounts, including a Tron wallet, to receive funds from Iran. Tron’s investment in World Liberty has raised concerns among ethics experts. Professor Kathleen Clark from Washington University in St. Louis, specializing in government ethics, expressed worry about the significant size of Tron’s investment in World Liberty, potential financial benefits for Trump, and the alleged use of Tron by militant groups such as Hamas and Hezbollah. Clark also highlighted an investigation by the U.S. Securities and Exchange Commission into Tron founder Sun for fraud. Sun, based in Switzerland and a citizen of Grenada, denied the SEC charges, which are ongoing.
Questions have been raised about potential conflicts of interest with Trump’s administration taking over the SEC in January, given World Liberty’s relationship with Sun. Spokespeople for Trump and his transition team did not directly address inquiries about Trump’s financial connections to World Liberty and the Tron investment.
Militant groups and criminals favor Tron due to its ability to conceal identities, low fees, and easy conversion into cash, according to crypto experts. Co-founder of World Liberty, who is a friend and donor to Trump, plans to place his investments in a blind trust, although he will retain ownership of his assets. Ethics specialists suggest that even with a blind trust, potential conflicts of interest remain, as Witkoff’s Middle East policy recommendations may be influenced by World Liberty’s interests rather than those of the United States. Trump’s involvement with World Liberty as the “chief crypto advocate” and entitlement to a portion of its revenues also presents potential conflicts of interest.
World Liberty offers a unique token that cannot be traded, unlike mainstream cryptocurrencies such as Bitcoin. According to the terms and conditions, Trump and other undisclosed “affiliates” are entitled to 75% of specific World Liberty revenues, creating speculation that individuals may purchase World Liberty coins in an attempt to gain favor with him. Clark remarked on the potential of this approach as an alternative method to ingratiate oneself with Trump. During his presidency, Trump’s business dealings came under scrutiny, with various governments spending millions at his properties without legal repercussions.
The connection between World Liberty and Trump is prominently displayed on the company’s website, featuring images of Trump and his family as key figures in the venture. The company’s team includes Trump and his sons, described as “Web3 ambassadors.” Through World Liberty, Trump and his family may benefit from regulatory changes in the crypto industry. The involvement of Witkoff, along with his sons, in World Liberty raises concerns about potential violations of the U.S. Constitution’s “emoluments” clause, aimed at preventing corruption and improper influence on government officials.
Witkoff’s appointment as Middle East envoy despite his lack of foreign policy experience has raised eyebrows among diplomats. His significant donation to a pro-Trump super PAC in 2023, coupled with his substantial wealth, has further sparked scrutiny. The overlap between Witkoff’s business endeavors and diplomatic role is becoming increasingly apparent, as seen in his participation at a crypto conference in Abu Dhabi where he was identified as Trump’s special envoy to the region. Attendees paid high fees for access to exclusive sessions.
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