41 House Democrats pressed Treasury Secretary Bessent to investigate World Liberty Financial's bank charter bid, citing Sheikh Tahnoon's $500M stake and systemic risk concerns.

Democrats Demand Treasury Probe WLFI Bank Charter Over UAE Stake

Forty-one House Democrats formally demanded that Treasury Secretary Scott Bessent investigate World Liberty Financial's application for a national trust bank charter, citing conflicts of interest, systemic risk, and national security concerns tied to a $500 million investment from UAE royal Sheikh Tahnoon bin Zayed Al Nahyan. The letter, led by Rep. Gregory Meeks of New York and sent Thursday, gives Treasury until February 26 to respond.

The push follows a contentious House Financial Services Committee hearing on February 4, where Meeks confronted Bessent directly about WLFI's charter application. During that exchange, Meeks called Bessent "Trump's flunky" after the Treasury Secretary refused to commit to pausing the Office of the Comptroller of the Currency's review of WLFI's application or launching an investigation into foreign influence concerns.

"Stop being his flunky," Meeks shouted during the hearing. "You're covering for the president. Don't be a flunky, work for the people."

Bessent responded that "the OCC is an independent entity," but didn't address whether he would intervene or request heightened scrutiny of the application. That non-answer set the stage for Thursday's formal letter, which escalates the pressure significantly.

World Liberty Financial applied for a national trust bank charter in January 2026. The charter would allow WLFI to issue and custody its USD1 stablecoin, manage reserve funds, and provide digital-asset custody and exchange services—essentially functioning as a regulated bank for crypto operations. The application is being reviewed by the OCC, an independent arm of Treasury that regulates national banks.

The Democrats' letter argues that approving such a charter for WLFI would create systemic risk. It cites warnings from the Bank Policy Institute and other independent experts that digital-asset trust structures, particularly those lacking tested liquidity and resolution frameworks, can amplify systemic risk if approved prematurely. The concern is that if WLFI's trust bank fails or faces a run, there's no established mechanism to wind it down safely without contagion spreading through the financial system.

But the bigger issue outlined in the letter isn't just prudential risk—it's foreign influence and national security. The Wall Street Journal reported that Sheikh Tahnoon bin Zayed Al Nahyan, a senior royal from the UAE and advisor to the Abu Dhabi crown prince, quietly acquired a $500 million stake in World Liberty Financial. Tahnoon is sometimes referred to as the "spy sheikh" due to his role overseeing the UAE's intelligence apparatus and his involvement in sensitive technology deals with Chinese firms.

The Democrats' letter notes that G42, a UAE-based AI firm with ties to Tahnoon, previously faced scrutiny during a CFIUS review over concerns that its participation could facilitate Chinese surveillance or access to sensitive U.S. data. The letter argues that WLFI's charter application creates similar risks: a foreign government-linked investor holding major equity in a company controlled by the president's family, while that president conducts foreign policy with the investor's country.

"When a foreign-linked investor is putting hundreds of millions of dollars into a company controlled by the president's family, and at the same time, this president is conducting foreign policy with that country, it creates a national security concern," Meeks said during the February 4 hearing.

The letter asks Treasury to clarify what safeguards are in place to ensure that "foreign government officials, sovereign proxies, or politically connected investors cannot use the bank-chartering process to gain leverage over the U.S. financial system or access sensitive financial or technological infrastructure." It also asks what role the White House, Office of Management and Budget, and Treasury itself play in reviewing, approving, or otherwise influencing national bank or trust chartering decisions made by the OCC.

That last question is significant because of an executive order Trump issued shortly after taking office, which Democrats argue erodes regulator independence. The letter references this order as evidence that the administration may be pressuring independent agencies to approve politically connected applications.

President Trump and his special envoy Steve Witkoff are listed as co-founders emeritus of World Liberty Financial. The company is run by Eric Trump, Donald Trump Jr., and members of the Witkoff family. DT Marks Defi LLC, an entity affiliated with Donald Trump and family members, holds approximately 38% beneficial ownership in an affiliate of WLFI, which entitles it to a portion of proceeds from the token sale and charter-related revenue.

In response to questions about the UAE investment, Trump told CNBC on February 10, "I don't know about it. I know that crypto is a big thing, and they like it." That claim of ignorance was met with skepticism given Trump's direct financial interest in the company through DT Marks Defi LLC.

World Liberty Financial dismissed earlier inquiries from lawmakers as "political harassment," but the formal letter signed by 41 Democrats carries more weight than individual member requests. The Feb. 26 deadline also creates a public record: if Bessent doesn't respond or provides evasive answers, Democrats can use that non-compliance as evidence of stonewalling during future hearings.

Separate from the House Democrats' letter, Senate Democrats also sent a letter to Bessent on February 13 calling for a CFIUS review of the UAE stake. That letter, led by Banking Committee members, argued that the investment could give a foreign government access to sensitive personal data of U.S. citizens, since WLFI's privacy policy states the company collects extensive user information and may share it with third parties.

Rep. Ro Khanna separately launched an investigation into whether the administration shifted its policy stance toward China in connection with the UAE deal, citing reports that Chinese-linked entities may have been involved in the transaction structure.

The cumulative effect of these probes is that WLFI's charter application is now under intense political scrutiny from multiple angles: systemic risk, foreign ownership, national security, and potential policy quid pro quos. That doesn't mean the OCC will deny the charter—the agency is technically independent and evaluates applications based on statutory criteria—but it does raise the political cost of approving it.

Partisan divides are hardening around the issue. Republicans largely view crypto regulation as overreach and see the charter application as a legitimate business pursuing legal pathways. Democrats view it as a conflict-of-interest minefield where a sitting president's family is profiting from a venture backed by a foreign government while pursuing a bank charter that could give that venture access to regulated financial infrastructure.

The Bank Policy Institute's warning about digital-asset trust structures is also relevant here. Traditional banks have FDIC insurance, liquidity requirements, capital buffers, and resolution frameworks tested over decades. Digital-asset trust companies are new, and the regulatory frameworks governing them are still being developed. If a crypto trust bank fails, it's unclear how regulators would handle the unwinding, especially if the failure involves international stakeholders and cross-border flows.

WLFI's charter application is part of a broader push by the Trump administration to establish regulatory clarity for stablecoins and crypto infrastructure. The administration has been openly supportive of crypto, and Trump himself described USD1 as infrastructure for the future financial services ecosystem. Approving WLFI's charter would signal that the administration is willing to integrate crypto firms into the regulated banking system rather than keeping them in a gray area.

But that integration creates risks if it's done without sufficient safeguards. The Democrats' letter is essentially asking: are we approving this charter because it meets prudential standards, or because it's politically connected? And if foreign governments can gain influence over U.S. financial infrastructure by investing in politically connected crypto ventures, what does that mean for financial sovereignty?

The Feb. 26 deadline puts Bessent in a difficult position. If he provides detailed answers, he risks legitimizing Democratic scrutiny and creating a paper trail that could be used against the administration. If he stonewalls or provides non-answers, Democrats will accuse him of prioritizing political loyalty over regulatory integrity.

The WLFI token itself has been volatile. As of February 20, it's trading at $0.1168, down 3% in 24 hours but up nearly 10% over the past week. The token launched in October 2024 and raised $550 million, but 80% of tokens sold to investors remain locked, creating frustration among holders. The token price is down roughly 60% from its all-time high.

Whether the OCC ultimately approves the charter will depend on factors beyond political pressure: capital adequacy, management experience, compliance infrastructure, and whether WLFI can demonstrate it meets the statutory requirements for a national trust bank. But the political environment surrounding the application is now toxic, and that makes approval far more complicated than it would be for a non-politically connected applicant.

What's clear is that the fight over WLFI's bank charter has become a proxy battle over broader questions: Can the president's family profit from ventures backed by foreign governments? Should crypto firms get access to regulated banking infrastructure? And who gets to decide—independent regulators, or political appointees?

The Feb. 26 deadline is just the next chapter. This fight isn't ending anytime soon.