President Trump’s Crypto Firm Expands Relationship With Embattled Blockchain Billionaire

Forbes Breaking News

Donald Trump has deepened his ties with Chinese billionaire Justin Sun—who’s fighting civil charges in the United States of fraud and market manipulation—as the president’s stablecoin begins minting on Sun’s blockchain, which hosted the largest share of illicit crypto activity last year, according to a crypto intelligence firm. Forbes staff writer Zach Everson joins "Forbes Newsroom" to discuss.

Transcript

00:00Hi, everybody. I'm Brittany Lewis, a breaking news reporter here at Forbes.

00:06Joining me now is my Forbes colleague, staff writer Zach Everson. Zach, thanks so much for

00:11joining me. Thanks for having me back. Looks like we have another exciting development in

00:16Trump's crypto world to discuss. We certainly do. Another conversation on crypto and President

00:22Trump's involvement. Your headline reads, President Trump's crypto firm expands relationship

00:28with embattled blockchain billionaire. The embattled blockchain billionaire in question

00:33here is Justin Sun. So talk to us about the controversy first that he has found himself

00:38in. So Forbes readers and viewers should be quite familiar with Justin Sun. He is a Chinese

00:45crypto billionaire who famously bought a piece of art that was a banana taped to the wall

00:51and also famously spent about 30 million dollars on Trump's crypto decentralized finance endeavor

01:00when it first launched and also was one of the top owners of the Trump mean coin, which

01:06is a separate Trump crypto endeavor and got himself an invite to dine with Trump at his

01:10D.C. area golf course and tour the White House. And he founded a company, Tron, in the crypto

01:15space. Talk to us about that company. Sure. Tron is a crypto exchange, a blockchain. It's

01:21also what led to his being so wealthy. It's also what has led to his legal problems. In March

01:272023, the Security Exchange Commission here in the United States filed civil charges against

01:32him and the company, alleging market manipulation and selling unregistered securities. Sun denied

01:38the charge. The judge paused the case recently at the request of both parties, a move that the

01:43SEC only agreed to after Sun had gotten personally involved in Trump's crypto business.

01:49And I want to read a really startling fact from your piece. Here's a stat you point out.

01:56In 2024, Tron hosted 58 percent of all illicit crypto activity, the most of any blockchain and

02:03more than Ethereum and Bitcoin combined. That is a lot of illicit activity there. That is,

02:09I mean, over 58 percent. That's the majority of all criminal activity. I mean, have they since

02:15cleaned up their act? What does that look like? Sure. So that the finding is from TRM Labs, which

02:21is a blockchain analysis company. It has gotten a little bit better, largely by working with TRM

02:28Labs. The company said, TRM Labs said to come up with a way to try to keep these illicit transactions

02:34from happening on the blockchain in the first place. Things like doing following know your

02:39customers rules a little bit better. So, yes, it is 58 percent. But the good news is for Tron,

02:44that was actually down from previous years.

02:47We now know, based on your reporting, that World Liberty Financial, the crypto company associated

02:52with the Trump family, is involved with TRON and Justin Sun. Talk to us about that relationship.

02:57So, World Liberty Financial and TRON announced recently that TRON was going to start minting

03:07World Liberty Financial stablecoin USD1 on its blockchain. So, what that means is, it's a lot

03:13of crypto jargon, World Liberty Financial came out with a stablecoin. And that is called USD1.

03:20And it's backed by, it's pegged to the dollar and it's backed by cash reserves and other U.S. treasuries.

03:27So, the way that World Liberty Financial and the Trumps in turn make money from this is that the

03:33more they have, the more of the stablecoin that's minted, the more money they have to invest in these

03:39treasuries. And as the website World Liberty says, the proceeds, the part of the proceeds of the

03:45interest made from these reserves will go to the Trumps. So, now what you basically have is,

03:50TRON, on his blockchain, Justin Sun, is making the currency that helps the Trumps obtain reserves

03:57that they will then profit off of. And so, have the Trumps, have the White House, has World Liberty

04:04Financial responded to you when you've asked about this relationship, given the fact that TRON and,

04:11as well as Justin Sun, have had some issues with the SEC in the past?

04:16So, World Liberty declined to comment this time. TRON and the Trump Organization did not respond to

04:23inquiries. White House Deputy Press Secretary Anna Kelly told me in a statement that Trump has no

04:29conflicts of interest because his assets are in a trust managed by his children. Now, the president,

04:34that is true, the president cannot have conflicts of interest. But, you know, saying that it's because

04:38his assets are in a trust managed by his children doesn't matter. You know, it's all of Trump's

04:43assets, or most of his assets, are in the Donald J. Trump revocable trust. He is the only donor to

04:49that trust. He is the only beneficiary of that trust. It is revocable, so he can take money in,

04:54money out of it at any time. And the trustee is coincidentally, he shares almost the same name,

04:59Donald Trump Jr. So, that's just a little bit of window dressing right there.

05:02And one of our colleagues, Dan Alexander, reported earlier this month that President Trump's majority

05:10of his net worth is thanks to his involvement in crypto. So, he's made over $3 million in the crypto

05:16space. Financially, what does this expanded relationship here mean for President Trump?

05:21It's a growth opportunity. The more of USD 1 that Tron mints, the more the reserves that World

05:29Liberty Financial will have to try to make interest off of, and the more interest it'll have to then

05:34go ahead and pay out to Donald Trump and his family. And so, how much, remind us,

05:39how much has President Trump made so far with his involvement in World Liberty Financial?

05:43Yeah, he's doing pretty well with that. He came out with a financial disclosure,

05:49I guess it was about two weeks ago at this point, that said he made $57.4 million from World Liberty

05:56Financial in 2024. And keep in mind, the venture only launched in September, and the stablecoin

06:02didn't even come out till this year. So, that's not included on it. That is just $57.4 million from

06:08selling tokens in the decentralized finance project to begin with. So, just in a few months, he did quite

06:14well. Based on our conversations in the past couple of weeks, it seems like World Liberty Financial is

06:19really expanding, and this isn't their first relationship with a controversial blockchain.

06:24Remind us of the others. Sure. As we reported earlier, it is also trading on KuCoin, which is an

06:30exchange that was recently banned from the United States after admitting to anti-money laundering

06:35violations, and it agreed to pay $300 million in penalties. And it's also trading on Binance,

06:41which admitted in a November 2023 pre-deal with the Justice Department to anti-money laundering and

06:47sanctions violations, agreed to pay a whopping $4 billion in penalties. Days after the stablecoins

06:54started trading on Binance, though, the SEC dropped a separate lawsuit it had brought against the front.

07:00And so, I want to zoom out for just a moment here. President Trump wants to be the first crypto

07:05president. He vowed to make the United States the crypto capital of the world. I mean, when you're

07:10looking at this relationship, World Liberty Financial, with this blockchain, what does that indicate to

07:17you about where he's going policy-wise when it comes to crypto? Well, we have wonderful synergies

07:24going on between the Trump administration and the Trump organization, to use that polite term.

07:30We're seeing him working off each other. You know, what comes out of the administration

07:35will benefit his organization. And yeah, I mean, he's absolutely trying to make it as crypto-friendly

07:41as possible, which is a 180 from where he previously was on it. But somewhere along the

07:45line, you know, Donald Trump realized there was money to be made out of crypto, which he referred

07:49to as in-air previously, I believe. I think one person's synergy is another person's conflict of

07:55interest. What are lawmakers thinking about this synergy? Republicans don't seem to have many problems

08:02with it. I think some of them said it may give him a little bit of pause. You know, there is an issue

08:06where pro-crypto people are trying to make the industry look legitimate. And that's one of the main

08:15points of this Genius Act that recently passed the Senate. They want to have some regulations in there.

08:19They want to have the right regulations, though. They don't want it to be regulated too heavily.

08:23So they're trying to encourage people to invest and think that it is a viable asset without really

08:29hampering their ability to do business. And they're finding that Donald Trump's synergies

08:35are causing some issues with voters and that they're finding that it's really giving crypto,

08:41you know, it's not helping him appear any more legitimate. And then, of course,

08:45you find Democrats who are rather upset by this. Jeff Merkley, Democrat of Oregon,

08:49has introduced the End Crypto Corruption Act, which would ban presidents and other top officials

08:55from endorsing their own crypto assets. So I'm pretty clear that's targeted towards our current

09:01president, although who knows, you know, if he makes a lot of money off it, maybe we'll find future

09:05presidents doing that question. Well, Zach Everson, per usual, I appreciate the conversation. Thanks for

09:10joining me. My pleasure. I'm sure we'll be back to talk about crypto sometime soon.

09:25Thanks.

Category

Transcript

Recommended