A cryptocurrency venture with ties to former U.S. President Donald Trump, World Liberty Financial (WLFI), is under intense regulatory and media scrutiny following revelations about its partnership with a blockchain project connected to a sanctioned criminal network. According to investigations by The Times and CoinDesk, WLFI—a decentralized finance project co-founded by Trump and partly owned by his family—entered a strategic partnership in November 2024 with Southeast Asia-based blockchain project AB DAO to integrate its USD1 stablecoin.
The controversy centers on AB DAO's promotion of a resort project linked to Cambodia's Prince Group, an organization described by U.S. authorities as a major transnational criminal network. U.S. and U.K. authorities had sanctioned Prince Group founder Chen Zhi and associates in October 2024 for alleged involvement in large-scale fraud, including a massive "pig butchering" cryptocurrency scam. Individuals connected to the group were involved in AB DAO's promoted resort project until being removed following the sanctions.
WLFI stated it conducted due diligence before the partnership and has "no association or relationship with the sanctioned individuals." However, compliance experts question the effectiveness of its procedures, as the public promotion of the Prince Group-linked resort by AB DAO occurred around the time of the partnership announcement. The report raises broader questions about governance and external relationships at WLFI, which was launched in September 2024.
This incident adds to existing political and financial controversies surrounding WLFI. Reporting by The Wall Street Journal in January 2025 revealed that a company backed by United Arab Emirates national security adviser Sheik Tahnoon bin Zayed Al Nahyan quietly agreed to acquire a 49% stake in WLFI for $500 million shortly before Trump returned to office—a deal described as "something unprecedented in American politics" that raised conflict-of-interest concerns. The White House has denied any impropriety.
The situation highlights significant compliance challenges within the DeFi sector, particularly for projects with high-profile political connections. It is likely to draw increased scrutiny from multiple regulatory bodies, including the Financial Crimes Enforcement Network (FinCEN), the Securities and Exchange Commission (SEC), the Office of Foreign Assets Control (OFAC), and the Department of Justice (DOJ).
