US House probes $500M Abu Dhabi-linked stake in World Liberty Financial, questions USD1 stablecoin role
The US House Select Committee has opened a probe into World Liberty Financial (WLFI) after reports that an Abu Dhabi-linked vehicle, Aryam Investment 1, agreed to buy up to 49% of WLFI for $500 million around President Trump’s 2025 inauguration. Representative Ro Khanna requested WLFI provide ownership records, capitalization tables, profit-allocation details, internal communications, board appointment records and due-diligence materials on Aryam Investment 1. The committee seeks confirmation whether roughly $187 million flowed to Trump-related entities or whether payments were made to founders’ affiliates. Investigators are also examining WLFI’s USD1 stablecoin and its reported use to settle MGX’s $2 billion investment in Binance, any revenue WLFI earned from that transaction, and whether WLFI personnel discussed a presidential pardon for Binance CEO Changpeng Zhao. The committee cited national-security concerns including potential foreign sovereign influence and exposure tied to AI chip export controls. Congress ordered WLFI to preserve electronic communications and compliance records and to deliver requested documents by March 1. Traders should watch for heightened regulatory and political scrutiny on WLFI and the USD1 stablecoin: the probe raises counterparty and compliance risk, could prompt market volatility for tokens or firms tied to WLFI, and may trigger tighter oversight of stablecoin use in large cross-border deals.
Bearish
The investigation creates immediate negative pressure on WLFI-linked assets and the USD1 stablecoin. Short term, increased regulatory and political scrutiny raises counterparty and legal risk, likely prompting selling or risk-off positioning by traders exposed to WLFI or the stablecoin; news-driven volatility is probable. The probe’s focus on undisclosed payments, foreign sovereign involvement and a high-profile Binance connection heightens reputational risk and could reduce market confidence in USD1 as a settlement instrument, affecting liquidity for instruments relying on it. Longer term, outcomes depend on findings: a narrow, cleared outcome could stabilize markets, but evidence of undisclosed flows, regulatory violations, or national-security concerns could trigger enforcement actions, sanctions, or tighter stablecoin oversight — all bearish for WLFI-linked tokens and any instruments relying on USD1. For Binance the impact is indirect; reputational spillover and scrutiny of large cross-border stablecoin use could temporarily pressure related markets, but not necessarily change fundamentals for major cryptocurrencies unless broader regulatory actions follow.