Senators Push Treasury for CFIUS Review of $500 Million UAE Stake in Trump‑Linked Crypto Firm
Washington, D.C. – Two Senate Democrats have formally asked the Treasury Department to determine whether a proposed foreign investment in the cryptocurrency platform World Liberty Financial (WLFI) warrants a review by the Committee on Foreign Investment in the United States (CFIUS). In a letter dated Friday, Massachusetts Senator Elizabeth Warren and New Jersey Senator Andy Kim wrote to Treasury Secretary Scott Bessent, who also chairs CFIUS, requesting clarification on whether the committee was notified of the deal and, if not, urging a “comprehensive, thorough, and unbiased investigation.”
Deal Overview
- Investor: An investment vehicle backed by the United Arab Emirates, reportedly overseen by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser.
- Target: World Liberty Financial (WLFI), a crypto‑focused financial services firm with ties to the Trump family.
- Transaction: Purchase of a 49 % equity stake for roughly $500 million, making the UAE‑backed fund the largest shareholder and the only publicly identified foreign investor.
- Timing: The agreement was signed days before Donald Trump’s inauguration in January 2025.
- Capital Flow: About $187 million of the proceeds are earmarked for entities linked to members of the Trump family.
- Governance: The deal includes two board seats for executives connected to G42, a UAE technology company that has previously drawn scrutiny from U.S. intelligence agencies over alleged ties to China.
National‑Security Concerns
Warren and Kim note that WLFI’s privacy disclosures reveal the platform collects a range of sensitive user data, including:
- Cryptocurrency wallet addresses
- IP addresses and device identifiers
- Approximate geographic location
- Certain personally identifying information supplied by third‑party service providers
Under the CFIUS mandate, any foreign investment that could provide a non‑U.S. entity access to sensitive personal data or critical technology is subject to review. The senators argue that the structure of the transaction could give a foreign government indirect influence over a U.S. company that handles such data.
Prior Congressional Action
The current request follows earlier letters from Senator Warren and Senator Jack Reed in late 2023, which urged authorities to investigate WLFI’s token sales after reports that blockchain addresses linked to North Korea’s Lazarus Group, as well as Russian and Iranian actors, had purchased the firm’s governance tokens. Those letters highlighted potential violations of sanctions and broader national‑security risks.
Trump’s Response
President Donald Trump has publicly denied any personal involvement in the investment. Speaking to reporters, he said the matter is being handled by his family, adding, “My sons are handling that — my family is handling it. I guess they get investments from different people.” The president’s statement does not address the legality or security implications of the deal.
What CFIUS Could Do
If CFIUS determines that the investment poses a risk, it has several options:
- Approval with Mitigations – Requiring WLFI to adopt safeguards (e.g., data‑segregation, limited board influence).
- Divestiture – Ordering the foreign investor to sell its stake.
- Blocking the Transaction – Preventing the deal from closing.
Any of these outcomes could affect WLFI’s ability to raise capital, expand its crypto services, and maintain its existing governance structure.
Analysis
The request for a CFIUS review underscores growing congressional scrutiny of foreign capital flowing into U.S. cryptocurrency firms, especially those with political connections. While foreign investment can provide needed liquidity for crypto startups, the sector’s reliance on large volumes of personal and transactional data makes it a potential vector for espionage or influence operations.
The involvement of a high‑profile UAE official and a tech company under previous intelligence review raises the stakes. Moreover, the proximity of the transaction to the Trump inauguration amplifies political sensitivities, potentially prompting a more aggressive regulatory posture.
If CFIUS proceeds with an investigation, the case could set a precedent for how future crypto‑related foreign investments are evaluated, potentially leading to tighter disclosure requirements and heightened due‑diligence standards across the industry.
Key Takeaways
- Senators Warren and Kim have formally asked Treasury to confirm CFIUS notification and consider a review of a $500 M UAE‑backed purchase of a 49 % stake in WLFI.
- The deal involves a UAE national‑security adviser and allocates substantial capital to entities tied to the Trump family, with board representation for executives linked to G42.
- WLFI’s data‑collection practices – encompassing wallet addresses, IP data, device IDs and location – trigger CFIUS concerns about foreign access to U.S. personal information.
- Previous congressional letters have highlighted possible sanctions‑related token purchases by North Korean, Russian and Iranian actors, adding to the security narrative.
- President Trump has denied personal involvement, stating his sons are handling the investment.
- A CFIUS probe could mandate mitigation measures, force divestiture, or block the transaction, influencing both WLFI’s operations and the broader crypto investment climate.
The Treasury is expected to respond by March 5, after which CFIUS will decide whether a formal investigation is warranted. The outcome will likely reverberate through the cryptocurrency sector, shaping how foreign capital is scrutinized in a space that sits at the intersection of finance, technology, and national security.
Source: https://cointelegraph.com/news/senators-urge-cfius-probe-uae-stake-trump-linked-wlfi?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
