Crews
A crypto venture recently unveiled by US President-elect Donald Trump and his new Middle East envoy, billionaire Steve Witkoff, has partnered with a crypto platform that authorities and financial experts say has been used by criminals and Iran-backed militant groups Hamas and Hezbollah.
World Liberty Financial Inc, founded by the Witkoff family two months before the US election with Trump as a financial beneficiary, raises concerns over ethics and conflicts of interest, say six specialists in US government ethics.
The crypto platform, Tron, has been used to transfer funds associated with groups designated as terror organizations by Israel, the United States, and other countries, according to seven financial crime experts and cryptocurrency investigations specialists cited in a report by Reuters in 2023.
Tron announced last month it was investing $30 million in World Liberty. Tron’s founder, Chinese-born entrepreneur Justin Sun, will join the Trump-Witkoff venture as an advisor, Sun and World Liberty said on social media platform X.
The British Virgin Islands-registered Tron is now World Liberty’s largest investor, Sun said.
The Israeli National Bureau for Counter Terror Financing (NBTCF), which is responsible for seizing crypto assets linked to terrorist organizations, has frozen 186 Tron wallets since July 2021, stating they were used by a “designated terrorist organization” or for a “severe terror crime.” Of those, Israeli authorities linked 84 Tron wallets to Hamas or Hamas allies, including Islamic Jihad, 39 to Hezbollah, and 63 to unspecified terrorist groups or money changers.
The most recent Tron seizure was announced on March 28. Reuters could not independently determine Tron’s use by militant groups, and the NBTCF did not provide evidence for its assertions or respond to requests for more details. Hamas and Hezbollah did not respond to requests for comment.
Militant groups and criminals use Tron because it gives users the option to conceal their identities, charges low fees, and can be converted into cash easily, according to some crypto experts.
The collaboration with World Liberty has raised red flags among ethics experts, who cite the significant size of Tron’s investment in World Liberty, potential financial benefits for Trump, and the alleged use of Tron by militants, including Hamas and Hezbollah.
Kathleen Clark, a professor at Washington University in St. Louis who specializes in government ethics, questioned whether Trump’s involvement with World Liberty would pose a conflict of interest, given his financial ties to Tron and the potential for political influence over regulatory decisions.
Clark also pointed to the investigation of Tron founder Justin Sun by the US Securities and Exchange Commission, which accused him of fraud and concealing payment to celebrities to promote his companies. Sun has denied the allegations, saying they lack merit.
Trump’s potential conflicts of interest come as he prepares to take office and assume control of the SEC, which regulates the crypto industry. His business dealings have faced scrutiny in the past, including allegations of foreign government influence and potential conflicts of interest.
World Liberty’s connection to Trump is highlighted on the company’s website, which features a picture of him and his three sons, Don Jr., Eric, and Barron, described as “Web3 ambassadors.” Trump is listed as “chief crypto advocate” and is entitled to a cut of World Liberty’s revenues, according to the company’s terms and conditions.
