Two lawsuits are putting World Liberty Financial (WLFI), the Trump family’s crypto venture, under growing scrutiny. One involves frozen tokens and an alleged business dispute with TRON founder Justin Sun. The other accuses President Donald Trump and WLFI of benefiting from UAE-linked transactions that allegedly violated the US Constitution and harmed Circle, the issuer of USDC.
Filed on October 22 by J. Benjamin Greenberg, a Circle shareholder, the second lawsuit centers on two transactions worth a combined $2.5 billion: a $500 million investment in WLFI and a separate $2 billion investment in Binance settled using WLFI’s USD1 stablecoin.
Both transactions involved entities linked to Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser.
The allegations remain unproven, and Circle has distanced itself from the lawsuit. But the case raises questions about foreign investment, political conflicts of interest and competition in the stablecoin market—particularly as USD1 advances toward a potential national trust bank charter.
The $500 Million Deal and the $2 Billion Stablecoin Settlement
Greenberg’s complaint focuses on two transactions that, together, connect UAE-linked capital, the Trump family’s business interests and USD1’s growing adoption.
The first was a $500 million equity investment.
In January 2025, days before Trump’s inauguration, Abu Dhabi-based Aryam Investment 1 agreed to acquire a 49% stake in WLFI. The entity is backed by Tahnoon.
According to The Wall Street Journal, the initial $250 million installment included approximately $187 million for Trump family entities and at least $31 million for entities affiliated with the Witkoff family. Eric Trump signed the agreement.
The deal attracted attention because WLFI reportedly had not yet launched a product at the time. The lawsuit alleges that the transaction violated the Foreign Emoluments Clause, which restricts federal officeholders from accepting certain benefits from foreign states without congressional consent.
The second transaction involved $2 billion in stablecoin settlement.
In March, UAE-backed investment fund MGX announced a $2 billion investment in Binance. MGX is chaired by Tahnoon. On May 1, Eric Trump said the investment had been settled using USD1.
The complaint argues that the transaction helped expand USD1’s business at Circle’s expense.
But there is an important distinction: the use of USD1 for a $2 billion settlement does not establish that Circle would otherwise have won the business, nor does it mean Circle lost $2 billion in revenue. The plaintiff must establish the alleged commercial harm and connect it to the conduct challenged in court.
Binance CEO Richard Teng has said MGX chose USD1 for the settlement and that Binance gave no preferential treatment.
Circle Says It Did Not Bring the Lawsuit
Greenberg reportedly holds around 10,000 Circle shares and is pursuing the case in the company’s name, arguing that WLFI’s foreign-backed transactions harmed Circle’s commercial interests.
Circle has explicitly distanced itself from the filing, stating that the lawsuit was brought by an individual shareholder and that the company did not initiate, direct, authorize or participate in it.
WLFI has rejected the allegations. A spokesperson called the lawsuit “baseless” and said the company complies with US law. Its lawyer dismissed the filing as a partisan press release. WLFI has also previously said Trump was not involved in the equity transaction and holds no role in the project.
Before the court considers the substance of the allegations, the plaintiff faces a fundamental legal question: does he have the right to bring the case on Circle’s behalf?
The Legal Hurdle: Standing
The Foreign Emoluments Clause has featured in several lawsuits involving Trump’s business interests during his first presidency. Those cases, brought by watchdog groups, state officials and lawmakers, often turned on whether the plaintiffs could demonstrate a concrete injury that gave them standing to sue.
Greenberg’s approach differs because he alleges harm to a company in which he owns shares, rather than relying solely on a public-interest argument.
That distinction does not guarantee success. The court must determine whether he can properly pursue the claims on Circle’s behalf and whether the alleged commercial injury is sufficiently connected to the challenged transactions.
Circle’s decision to distance itself from the suit adds another complication. Until the court addresses these threshold questions, the allegations remain allegations—not findings of constitutional violations.
Justin Sun’s Separate Fight With WLFI
Greenberg is not the only investor taking WLFI to court.
In April 2026, TRON founder Justin Sun sued WLFI in federal court in California. According to Reuters, Sun invested $45 million in the project and alleges that WLFI froze his tokens after blacklisting a wallet holding more than 500 million tokens in September 2025.
Sun also alleges that WLFI pressured him to issue and promote USD1 on the TRON network, then retaliated when he refused.
WLFI denies the allegations. Steve Witkoff has publicly accused Sun of trying to deflect attention from his own conduct.
Sun has characterized his lawsuit as a business dispute and said he continues to support Trump’s crypto policies and AI strategy. He has also argued that the amount at issue would not materially affect his overall wealth.
The two lawsuits concern different issues. Sun’s case focuses on token freezes and investor rights; Greenberg’s focuses on foreign-linked transactions and alleged competitive harm to Circle.
Yet both bring attention to USD1’s commercial expansion and the relationships surrounding it.
A Bank Charter Adds Another Layer of Scrutiny
On August 14, the Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval to World Liberty Trust Company’s application for a national trust bank charter.
The approval is not a final authorization to begin operating. WLFI must still meet the relevant conditions and complete the required regulatory procedures.
If the charter receives final approval, World Liberty Trust Company would take over USD1 issuance and reserve custody from BitGo. National trust banks generally operate under a different framework from commercial banks and typically cannot accept deposits or make loans like ordinary commercial banks.
Circle has also received preliminary conditional approval for a similar charter.
During WLFI’s review, the OCC received comments raising concerns about UAE-linked investors, the Trump family and the Foreign Emoluments Clause. The agency’s approval letter said the foreign investors were not major shareholders of the proposed bank and noted commitments from certain investors to maintain passive stakes without seeking to control or influence its operations.
Eric Trump signed on behalf of one investment entity.
Crucially, the OCC treated questions concerning potential constitutional conflicts as outside the scope of its charter review and noted that WLFI itself was not the applicant. The preliminary charter approval does not establish whether the Foreign Emoluments Clause was violated.
The development nevertheless matters commercially. Circle has built its position partly on regulatory credentials, and a potential banking charter for USD1 could narrow the gap between the two stablecoin businesses.
Congress Has Raised Questions, but No Final Answer Has Emerged
The scrutiny extends beyond the courts and banking regulators.
In February, two Democratic members of the Senate Banking Committee asked the Treasury secretary whether the $500 million purchase of a roughly 49% stake in WLFI by UAE-linked investors required review by the Committee on Foreign Investment in the United States (CFIUS). They requested a review if applicable.
Democratic lawmakers in the House have also called for scrutiny of the transaction.
These requests do not establish that the deal violated national security rules or constitutional restrictions. Nor has the OCC’s preliminary approval resolved those questions.
The legal and regulatory processes address different issues: the court must consider the plaintiff’s standing and the merits of his claims, while banking regulators assess whether the proposed institution meets charter requirements. Any national security review would follow its own legal framework.
What the Cases Could Mean for USD1
The disputes arrive as stablecoin issuers compete for institutional customers, exchange integrations and regulatory legitimacy.
For USD1, the $2 billion Binance settlement represents a high-profile use case. For Circle, the complaint alleges that WLFI’s relationships and access to capital created an unfair competitive advantage. Whether that argument can be substantiated is a separate question from whether USD1 can secure a banking charter.
The two lawsuits also highlight different risks for crypto businesses operating near political power. Investors may question how projects handle governance and contractual rights, while regulators and courts may examine the relationships between foreign capital, commercial benefits and public office.
For now, no court has established that the transactions violated the Constitution, and the preliminary charter approval is not a finding that they did not.
The central question is whether the legal and regulatory systems can independently assess these relationships while distinguishing legitimate commercial activity from any conduct that violates the law. The answers could shape not only WLFI’s future, but also how investors evaluate stablecoin projects whose business ambitions intersect with political influence and global capital.
This article is for informational purposes only and does not constitute investment advice.