Financial watchdogs and Democratic lawmakers are raising serious concerns about potential conflicts of interest as the Trump administration rapidly rolls back cryptocurrency regulations while the Trump family simultaneously expands its investments in the sector.
Since returning to office, President Trump has appointed crypto industry allies to key regulatory positions, including at the Securities and Exchange Commission (SEC). These appointees have quickly moved to ease industry oversight, with the SEC dropping or pausing investigations into more than a dozen crypto firms.
Additionally, the Justice Department recently disbanded a national cryptocurrency enforcement team established in 2022 that had successfully prosecuted several high-profile cases against crypto criminals.
Trump Family Crypto Ventures
This regulatory pullback comes as World Liberty Financial, a crypto firm in which the Trump family holds significant financial interests, experiences rapid growth. The company recently launched its own “stablecoin” called USD1, which is pegged to the U.S. dollar.
According to Reuters, World Liberty Financial has raised over $500 million in recent months, with the Trump family controlling the majority of the business and entitled to approximately $400 million in fees plus 75% of revenues from token sales.
“Trump and his family are clearly eager to establish a broad foothold in the sector prior to further regulatory actions that are likely to boost crypto asset valuations,” noted Cornell economist Eswar Prasad. “Such investments by the Trump family take potential conflicts of interest to an altogether new level.”
The president’s sons, Eric and Donald Jr., have actively promoted World Liberty Financial and launched additional crypto ventures. In late March, they announced investments in a bitcoin-mining operation called American Bitcoin. Donald Trump Jr. has publicly stated that his interest in cryptocurrency stemmed from perceiving the traditional financial system as “discriminatory” toward conservatives.
Regulatory Pushback
Democratic Senator Elizabeth Warren of Massachusetts has been particularly vocal about these developments: “Donald Trump is enriching himself and his family through their crypto businesses while his administration guts oversight of the market. It’s a massive conflict of interest and a recipe for disaster.”
Warren and Representative Maxine Waters have written to the SEC requesting information about its decision to halt enforcement actions against Justin Sun, a controversial crypto figure who invested $75 million in World Liberty Financial. Sun had previously been sued by the SEC in 2023 for alleged fraudulent market manipulation.
Critics are also concerned about pending legislation that would further deregulate the industry. A Senate bill dubbed “the Genius Act” would ease regulatory controls on stablecoins at a time when studies show these digital assets are increasingly being used for money laundering by Chinese exporters of fentanyl and other synthetic drugs.
President Trump has embraced cryptocurrency enthusiastically, hosting the first-ever White House “crypto summit” in March where he pledged to make America “the bitcoin superpower of the world.”
He also issued an executive order establishing a national stockpile of bitcoin and other cryptocurrencies, a move economists warn could expose taxpayers to significant financial risks while primarily benefiting current bitcoin holders.
“Trump’s crypto deregulation isn’t about innovation,” Warren concluded. “It will mean opening the door for more fraud, more pump-and-dump schemes, and more financial instability that puts everyday Americans at risk.”
