World Liberty Financial’s WLFI token fell more than 6% over the past 24 hours after Sen. Elizabeth Warren called on the U.S. Securities and Exchange Commission (SEC) to investigate the Trump-backed crypto venture for possible securities law violations.
At the time of this writing, WLFI was trading at around $0.0612 at the time of writing, down 6.16% over the previous day, according to CoinMarketCap. The token’s market capitalization stood at approximately $1.94 billion, while 24-hour trading volume reached about $66.2 million.
Warren presses SEC for investigation
In a letter sent to SEC Chairman Paul Atkins on May 14, Warren said regulators should determine whether World Liberty Financial misled investors and violated federal securities laws. The Massachusetts senator argued that securities laws should be enforced regardless of a company’s political connections.
“As Congress considers crypto market structure legislation, it is critical that it both protects investors and shuts down the President and his family from profiting off of cryptocurrency while in office,” Warren wrote.
The letter was released on the same day the Senate Banking Committee advanced the CLARITY Act, which would establish a broader regulatory framework for digital assets.
$75 million loan draws scrutiny
A central focus of Warren’s letter was a financing transaction disclosed in April. According to the senator, World Liberty Financial borrowed roughly $75 million by posting nearly $440 million worth of WLFI tokens as collateral through Dolomite, a DeFi lending platform whose co-founder, Corey Caplan, also serves as World Liberty Financial’s chief technology officer and advisor.
The transaction reportedly involved the company depositing 5 billion WLFI tokens and borrowing approximately $65.4 million in its USD1 stablecoin and $10.3 million in USDC. Warren said about $15 million of the borrowed funds was later repaid. She argued that the deal raised concerns about investor protection and may have strained liquidity on Dolomite.
Governance proposal sparks investor concerns
Warren also pointed to an April 15 governance proposal that would unlock 62.3 billion previously restricted WLFI tokens. Under the proposal, early backers would retain their holdings subject to vesting terms, while founders, team members, advisors, and partners would have 10% of their allocations burned and the remainder vested over several years.
Warren said the changes effectively forced investors to accept new conditions or remain locked out of most of their holdings indefinitely.
The project is also facing legal action from Justin Sun, who was previously one of WLFI’s largest investors. Sun alleged in a California federal lawsuit that World Liberty Financial froze tokens worth as much as $1 billion after he declined to invest additional funds in the company’s USD1 stablecoin initiative. World Liberty Financial has denied the allegations and has filed legal claims against Sun in response.
Political and regulatory spotlight intensifies
World Liberty Financial has attracted outsized attention because of its ties to President Donald Trump and members of his family.
Warren’s request to the SEC adds to broader calls from Democrats for conflict-of-interest provisions in crypto legislation that would limit the ability of elected officials and their families to profit from digital asset ventures while in office.
The SEC has not publicly indicated whether it has opened a formal investigation into World Liberty Financial.
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