Trump-Linked Crypto Firm Faces Scrutiny Amidst Market Downturn
A cryptocurrency venture with ties to the Trump family, World Liberty Financial (WLFI), is facing increased scrutiny from both regulators and investors as the crypto market experiences renewed volatility. The firm, co-founded by Eric Trump, is simultaneously pursuing ambitious plans to tokenize real estate while navigating a formal investigation by House Democrats and a significant downturn in the value of its associated digital assets.
The House investigation, launched on , centers around a deal that granted a 49% stake in WLFI to Aryam Investment 1, an entity linked to Sheikh Tahnoon bin Zayed Al Nahyan of the United Arab Emirates. Lawmakers are questioning the timing of the agreement – just days before Donald Trump’s second inauguration – and potential conflicts of interest, according to reports.
The $500 million investment was structured with an initial payment of $250 million, with the remaining $250 million due by . The probe, initiated by Rep. Ro Khanna, follows a Wall Street Journal report detailing the previously undisclosed deal and its connections to senior UAE officials.
This investigation comes as WLFI is actively working to tokenize a real estate project, specifically a building currently under development. Eric Trump, in an interview with CoinDesk TV, described the initiative as potentially offering fractional ownership to the public, leveraging the crypto infrastructure built by World Liberty Financial. “We are working on it as it pertains to one specific building that I’m doing right now,” Trump said. “I think it’s going to be absolutely incredible.”
The concept of tokenization, as explained by Trump, could allow for micro-investments and perks tied to property ownership, while also providing a means of raising funds outside of traditional banking channels. This plan builds on earlier discussions by WLFI co-founder Zach Witkoff, who in early October 2025, at the Token2049 event in Singapore, floated the idea of bringing the broader Trump real estate portfolio onchain.
However, the timing of these ambitious plans coincides with a broader downturn in the cryptocurrency market. Forbes reported in early December 2025 that American Bitcoin, a project also linked to the Trump family, experienced a 50% stock crash. This downturn has disproportionately impacted projects associated with the Trump family, highlighting the inherent risks within the volatile crypto landscape.
The market struggles extend beyond individual projects. Recent market activity, as reported by CNBC, saw the Dow Jones Industrial Average close lower by nearly 400 points, while the Nasdaq Composite dropped 1.9% as AI stocks resumed their decline. This broader market weakness adds further pressure on WLFI and its efforts to gain traction with its real estate tokenization project.
Concerns are also being raised about the potential risks to individual investors. A recent report in The Guardian highlighted cases of investors, like Cathy Shubert, who lost significant portions of their retirement savings after being sold high-risk investment products by financial advisors. This underscores the broader trend of Wall Street firms seeking to expand their reach into retirement accounts and offer more “alternative” investments, often with limited investor protection.
WLFI launched in September 2024 as a decentralized finance platform, promoting its stablecoin, USD1. The firm’s valuation and the lack of fully developed products have also drawn attention, adding to the scrutiny surrounding its operations and its connections to the Trump family.
As WLFI navigates the congressional probe, market volatility, and the challenges of launching a new tokenization project, the future of the venture remains uncertain. The situation underscores the complex interplay between cryptocurrency, politics, and the potential risks for investors in this rapidly evolving financial landscape.
