A new cryptocurrency venture linked to U.S. President-elect Donald Trump and his Middle East envoy, billionaire Steve Witkoff, has raised concerns due to its partnership with a crypto platform known to be utilized by criminals and Iran-backed militant groups Hamas and Hezbollah. World Liberty Financial Inc, established by the Witkoff family shortly before the U.S. election in November, has drawn scrutiny from six U.S. government ethics specialists over potential ethics violations and conflicts of interest. The venture’s association with the Tron crypto platform, which is quicker and more cost-effective than Bitcoin, has raised alarms as it has been identified as a preferred choice for crypto transactions involving groups designated as terrorist organizations by various nations, including Israel and the United States.
Tron recently announced a $30 million investment in World Liberty, with its founder, Chinese entrepreneur Justin Sun, set to join the venture as an advisor. Tron, registered in the British Virgin Islands, has become the largest investor in World Liberty. Israeli security services have flagged multiple instances of Tron being used by militant groups, such as Hamas and Hezbollah, with specific wallets frozen by Israel’s National Bureau for Counter Terror Financing (NBTCF) for alleged ties to terrorist activities. Despite claims of Tron’s use by militants, the company stated that its technology has attracted both legitimate and illicit users, emphasizing proactive measures to curb unlawful activities on its network.
The U.S. Treasury Department has seized Tron wallets, including an account linked to a group accused of fundraising for Hamas following an attack on Israel in 2023. Eric Trump, speaking at a crypto conference in Abu Dhabi, acknowledged concerns regarding criminal exploitation of cryptocurrencies but suggested that traditional financial institutions are also susceptible to misuse. Trump expressed confidence in the industry’s ability to self-regulate against illicit transactions.
The U.S. government has initiated actions against a money changer based in Lebanon for facilitating Hezbollah officials with cryptocurrency accounts, including a Tron wallet, to receive funds from Iran. The investment made by Tron in World Liberty has raised concerns among ethics experts. Kathleen Clark, a professor specializing in government ethics at Washington University in St. Louis, highlighted various red flags related to Tron’s investment, potential financial benefits for individuals like Trump, and the alleged involvement of Tron with militant groups such as Hamas and Hezbollah.
Clark also mentioned an ongoing investigation by the U.S. Securities and Exchange Commission into Tron founder Sun. In 2023, the SEC charged Sun with fraud, accusing him of manipulating trading volume and concealing payments to celebrities for promoting his companies. Sun, based in Switzerland and a citizen of Grenada, has denied the allegations, stating that the charges lack merit.
Questions have been raised regarding potential conflicts of interest due to the close relationship between World Liberty and Sun, especially with the involvement of Trump’s administration with the SEC in January. Representatives for Trump and his transition team did not directly address inquiries regarding Trump’s financial connections to World Liberty, the Tron investment, and possible conflicts of interest.
The appeal of Tron for militant groups and criminals lies in its ability to provide anonymity, low transaction fees, and easy conversion into cash, according to some cryptocurrency experts. The co-founder of World Liberty, who has ties to Trump and his campaign, intends to place his investments in a blind trust to manage potential conflicts of interest. However, concerns persist about conflicts arising from ownership stakes in companies like World Liberty.
Ethics specialists caution that even with a blind trust, conflicts of interest may arise if financial interests are tied to government decisions. The involvement of Trump as the “chief crypto advocate” on World Liberty’s website, along with entitlement to a share of revenues, presents potential conflicts that need to be addressed.
World Liberty offers a unique token that cannot be traded, unlike other cryptocurrencies such as Bitcoin. The terms and conditions specify that Trump and other undisclosed “affiliates” are entitled to 75% of certain revenues generated by World Liberty, potentially leading individuals to purchase World Liberty tokens in hopes of currying favor with him. Clark questioned whether this was an unconventional way to gain Trump’s approval through World Liberty.
During his presidency, Trump faced scrutiny over his business dealings, with numerous governments, including Saudi Arabia and China, collectively spending over $7.8 million at his properties. Despite this spending, Trump did not face legal repercussions. The Trump transition team did not provide information on how potential conflicts arising from World Liberty would be addressed.
The company heavily emphasizes its connection to Trump on its website, featuring images of Trump and his sons as key members described as “Web3 ambassadors.” The company’s launch event in September, unveiled by Trump and his associates, was highlighted by their involvement. Experts suggest that regulatory changes made by the Trump administration regarding crypto could also benefit Trump and his family through World Liberty.
The involvement of Witkoff’s sons as co-founders of World Liberty raises concerns of potential violations of the U.S. Constitution’s “emoluments” clause if foreign entities invest in the company. Witkoff’s appointment as the special envoy to the Middle East, despite his lack of foreign policy experience, has further blurred the lines between his business ventures and diplomatic responsibilities.
Witkoff’s participation in a crypto conference in Abu Dhabi, where he was identified as Trump’s special envoy while also promoting his crypto business, underscores the intertwining of his roles. Attendees paid high fees to access these special sessions at the conference.
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