Warren's move to suspend WLFI bank license application, Trump family crypto project faces political storm

Senator Warren has sent a letter to the Office of the Comptroller of the Currency (OCC), requesting a suspension of the trust bank license application process related to World Liberty Financial’s affiliated companies until President Trump divests the relevant holdings. This move pushes the issue of crypto regulation to the forefront of political confrontation and also reflects the deep vigilance of the U.S. political sphere regarding the integration of cryptocurrency and political power.

Warren’s Conflict of Interest Allegation

Specific demands and reasons

On January 14, Warren wrote to OCC Director Jonathan Gould, primarily requesting a halt to the approval process for World Liberty Trust Co.'s U.S. trust bank license. According to reports, WLTC Holdings LLC, an affiliate of World Liberty Financial Inc., submitted an application for a national trust bank license on January 11. If approved, it would be able to directly issue and custody USD1 stablecoins.

In her letter, Warren emphasized, “We have never seen such a scale of financial conflicts of interest or corruption.” She asked Gould to delay the entire approval process while Trump still holds potentially conflicting equity interests. This is not just a procedural pause but a direct political stance.

Warren’s Key Identity

Warren’s move is not an isolated voice. She is the lead Democratic senator on the Senate Banking Committee, which means she has actual influence over crypto regulation legislation. According to sources, the GENIUS Act is scheduled for a hearing on Thursday (January 16), and Warren is issuing warnings at this critical moment.

Political Background and Broader Crypto Regulation Disputes

Warren’s opposition to Trump

This is not the first time Warren has questioned Trump’s crypto policies. According to related reports, Warren has also explicitly opposed recent issues regarding cryptocurrencies in the context of the 401(k) retirement plan. She sent a letter to the U.S. Securities and Exchange Commission warning that including Bitcoin in the 401(k) plan could lead to “significant losses” for investors.

In contrast, the Trump administration has taken an entirely opposite stance. Last year, Trump signed an executive order requiring the Department of Labor to reassess the asset restrictions within the 401(k) plan, opening the door for cryptocurrencies to enter U.S. retirement accounts.

Missing Democratic Party Requirements in the GENIUS Act

According to sources, the draft of the GENIUS Act released late Monday night does not include the government ethics provisions demanded by Democratic senators during lengthy negotiations. Warren also mentioned this in her letter, stating, “Congress has failed to address these issues when passing the GENIUS Act, so the Senate must take responsibility for handling these real and serious conflicts of interest when reviewing crypto market structure legislation.”

This indicates that Warren’s suspension request is not only about the specific WLFI project but also about advocating for the inclusion of ethical standards in crypto regulation legislation by the Democratic Party.

Key Information about the WLFI Project

According to reports, the USD1 stablecoin is backed by USD and short-term U.S. Treasuries, and the trust bank will offer free exchange services upon launch. The project is growing rapidly but now faces political approval risks.

Possible Impact and Future Developments

Direct Impact on WLFI Project

Whether Warren’s suspension request will be adopted depends on the attitude of OCC Director Jonathan Gould. According to sources, the Banking Committee is about to review amendments and may vote to send the bill to the full Senate. How this issue will be resolved remains unclear.

If Warren’s request is accepted, the trust bank license application for WLFI will be delayed, directly affecting the issuance plan for USD1 stablecoins. If rejected, it could intensify the opposition between Democrats and the Trump administration on crypto regulation.

Politicization of Crypto Regulation

This incident reflects a deeper issue: U.S. crypto regulation is becoming highly politicized. Warren, representing the Democratic Party, takes a cautious stance on cryptocurrencies, while the Trump administration promotes their development and integration into traditional finance. The WLFI project has become a focal point of this political confrontation.

According to reports, Warren has recently criticized Trump’s crypto policies in multiple forums, including the 401(k) plan and stablecoin issuance. This suggests that similar confrontations may continue in upcoming crypto regulation legislation.

Summary

Warren’s request to suspend the WLFI bank license application is essentially a contest over the authority of crypto regulation and political stance. On the surface, it concerns conflicts of interest, but at a deeper level, it reflects the Democratic Party’s vigilance over Trump’s family’s involvement in crypto and their insistence on ethical standards in crypto regulation.

For the WLFI project, this could mean delays in approval processes. For the entire crypto industry, it signals that future regulation will continue to sway amid political opposition. The final form of the GENIUS Act and how the OCC handles this suspension request will be key indicators of the degree of politicization in U.S. crypto regulation.