US House Democrats have officially opened a formal probe into World Liberty Financial, a crypto venture linked to Donald Trump, following a Wall Street Journal report of a $500 million investment from an Abu Dhabi-linked entity. According to The Wall Street Journal, the investigation was launched this week by Rep. Ro Khanna (D-Calif.), ranking member of the House Select Committee on U.S.-China competition, with the probe starting in early February 2026. The inquiry centers around an alleged investment related to the UAE royal family, specifically Sheikh Tahnoon bin Zayed Al Nahyan, the UAE national security adviser and major investor. As per Coinvo, the deal reportedly gave him a 49% ownership stake in World Liberty Financial.
On Wednesday, Khanna wrote WLFI co-founder Zach Witkoff a formal letter demanding detailed documents and internal records. The company has been given until March 1, 2026, to submit ownership records, payment details, and internal communications. According to CoinDesk, the committee has demanded ownership records, payment trails (including whether $187 million flowed to Trump-family entities), capitalization tables, board appointment records, due diligence materials, internal communications and compliance policies. As reported by The Wall Street Journal, investigators are reviewing the size, timing and structure of the deal, with particular focus on whether the January 16, 2025 transaction date raises constitutional concerns under the Foreign Emoluments Clause. Lawmakers are also examining whether Trump family ties had an impact on regulatory decisions and whether safeguards were bypassed.
A significant portion of the inquiry focuses on World Liberty's USD1 stablecoin, which has seen substantial growth with its market capitalization currently standing at around $5 billion. According to DeFiLlama data, this growth has placed it among the top five stablecoins by market cap. The probe examines the $2 billion Binance investment that was reportedly for entities linked to the UAE and the USD1 stablecoin. As per CoinDesk, lawmakers are particularly interested in how WLFI products were utilized and want to know the revenue generated by the transaction. The investigation also requests documentation on the stablecoin's selection, transaction revenue and any company involvement in discussions about a later presidential pardon for Binance founder Changpeng Zhao. As per Coinvo, the investigation highlights concerns about crypto and national security as digital assets grow and lawmakers worry about foreign money influencing US financial systems.
The investigation has revealed that within months of the $500 million investment, the Trump administration reversed Biden-era restrictions and approved export licenses allowing the UAE access to tens of thousands of advanced AI chips previously blocked over concerns the technology could be diverted to China. According to Decrypt, Khanna noted that when lobbying did not resolve those restrictions, the UAE appeared to pair diplomacy with large investments tied to the incoming president's business network. The congressman specifically pointed to MGX's $2 billion investment into Binance that used World Liberty Financial's USD1 stablecoin for settlement, stating this likely boosted revenues tied to the firm. Khanna urged federal prosecutors to scrutinize the reported $500 million World Liberty Financial deal in a letter to Delaware U.S. Attorney Benjamin Wallace, noting that news reports indicate at least one entity involved in Aryam Investment 1's 49% stake purchase was registered in Delaware.
The investigation has uncovered significant Trump family connections to World Liberty Financial, with Zach Witkoff's father Steve Witkoff serving as President Trump's Special Envoy to the Middle East and both Steve Witkoff and Donald Trump listed as co-founders emeritus of World Liberty Financial on the firm's website. According to Decrypt, World Liberty Financial asserts that Trump and his family members do not hold any role as "director, officer or employee" of the firm. However, the probe raises questions about whether the transaction "may have contributed to changes to U.S. policy intended to prevent the diversion of advanced artificial intelligence chips to China from the UAE, potentially undermining the U.S. ability to outcompete the CCP and raising national security concerns." As per Coinvo, despite Trump's response, the investigation is still moving forward with officials not yet accusing anyone of wrongdoing.
