On the Eve of Midterm Elections, Trump-Linked Crypto Firms Scramble to Build Legal Defenses

Written by: Annie Massa, Olga Kharif, Bloomberg

Translated by: Luffy, Foresight News

Companies associated with President Donald Trump and his family are recruiting lawyers and lobbyists, as Democrats have threatened to launch comprehensive investigations if they win control of either chamber of Congress in the midterm elections.

Multiple sources familiar with the matter indicated that polls and prediction markets favor the Democrats. These companies tied to the Trump family, spanning crypto projects, venture capital firms, and the prediction market sector, are already preparing in advance for congressional inquiries.

Companies and individuals linked to the Trump family, including prediction markets like Polymarket and Kalshi, rare earth manufacturer Vulcan Elements Inc., and cryptocurrency leader Changpeng Zhao, who received a presidential pardon, have begun hiring prominent lobbyists and attorneys—some closely aligned with Democratic lawmakers—to brace for the expected political storm.

U.S. President Donald Trump speaking to reporters on the South Lawn of the White House

Trump and his family maintain publicly that all their business operations are fully legal. However, the concerted effort by these companies to hire top-tier legal and lobbying teams at high salaries indicates that their boards are actively preparing to respond. Democratic members of Congress have previously stated their intention to focus on investigating lucrative deals between government policy and the president’s personal commercial interests.

Sean Clerget, a senior partner at Corza O'Connor Law Firm who specializes in advising clients on congressional investigations, stated, 'These companies have begun assessing their own risks, planning how to handle potential congressional inquiry letters, and refining their public statements and response strategies. Democrats have made it very clear how they intend to scrutinize commercial ventures involving government officials and their families.'

The Democrats have already identified a batch of Trump family-related companies as investigation targets: they have sent letters requesting documents to World Liberty Financial, a crypto platform co-founded by Trump and his son, and to 1789 Capital, a venture capital firm where Donald Trump Jr. serves as a partner, while also monitoring portfolio companies such as Vulcan. Democrats have also written to the Department of Justice, inquiring about the details of Binance co-founder Changpeng Zhao's pardon. Binance previously assisted a company in which the president holds a stake in developing a stablecoin. A Binance spokesperson stated that the company merely provided standardized services to World Liberty Financial, such as token listings, which are offered to numerous other projects.

Richard Blumenthal, a Democratic senator on the Senate Judiciary Committee, said, 'We will examine one by one any projects and commercial arrangements suspected of illegal activity or conflicts of interest.'

Investigations May Face Multiple Obstacles

The Democrats' current line of questioning focuses on determining whether companies within Trump's inner circle have secured special government contracts or favorable policies. Suhas Subramanyam, a Democratic representative on the House Ethics Committee, stated that if Democrats gain a majority and subpoena power, they will delve deeply into transactions backed by solid evidence of misconduct.

However, such investigations face significant hurdles. Some documents are held overseas: World Liberty Financial received a $500 million investment from an entity under Abu Dhabi royalty member Sheikh Tahnoon bin Zayed Al Nahyan, a deal already singled out by Democrats. Congressional authority has limits, making it difficult to compel foreign individuals to testify or submit materials.

Sheikh Tahnoon bin Zayed Al Nahyan, who controls the renowned investment fund MGX

Furthermore, investigations may not ultimately uncover violations. All businesses linked to Trump claim that their partnerships and operational models comply with legal requirements. Democratic Senator Ron Wyden launched a conflict-of-interest investigation as early as 2024 into Jared Kushner's $6 billion private equity firm, Affinity Partners, but no criminal or civil lawsuits were eventually filed.

Many legal experts believe that since the Department of Justice has catered to Trump's personal wishes during his second term, it is highly unlikely to prosecute his business allies. After years of scrutiny, Trump and his family are acutely aware that the presidency grants broad legal protections and pardon powers. Noelle Acheson, a contributor to the blog Crypto is Macro Now, stated, 'Even if Democrats take both chambers, they cannot remove the current factors obstructing the DOJ, Treasury, and SEC from launching investigations.'

Sources familiar with the matter revealed that Donald Trump Jr. is unconcerned about congressional investigations in private conversations, believing that Democratic attacks could boost his support base. A spokesperson for Donald Trump Jr. declined to comment, and a representative for Eric Trump did not respond to interview requests. Trump's two sons have publicly stated that, as ordinary citizens, they have the right to serve as corporate advisors and participate in investments.

White House spokesperson Lauren Bis stated in a declaration, 'The Democrats have no plans to improve people's lives; their only goal is to continue a decade-long political persecution of President Trump.'

'The Core Purpose Is to Provoke the Opponent'

Nevertheless, the Democrats are likely to center their 2028 presidential campaign on drawing contrasts with Trump. Aaron Cutler, head of government relations and public affairs at Hogan Lovells, believes the investigations themselves carry a political agenda. 'For these Democratic lawmakers, the primary objective is to provoke and irritate Trump, creating trouble for those around him.'

On paper, congressional investigations must serve legislative purposes, otherwise critics will accuse lawmakers of using taxpayer money for partisan battles. However, most Democrats believe that exposing extensive facts of the president profiting from his office creates a sharp contrast with everyday voters struggling financially. New Mexico Representative Melanie Stansbury noted, 'There is no internal division among Democrats on this issue; everyone wants to halt misconduct and hold this administration accountable.'

The following Trump family-affiliated enterprises are already under scrutiny, with many expanding their legal and lobbying teams ahead of the midterm elections:

World Liberty Financial

World Liberty Financial was the primary source of Trump's cryptocurrency income last year. The platform was jointly founded by Trump, his two sons, presidential envoy Steve Witkoff, and his family several months before the 2024 election. According to financial disclosures, the project alone generated $594 million in revenue for Trump in the past year.

The project launched two tokens: WLFI and USD1, a dollar-pegged stablecoin, both capable of generating returns for the Trump family. An entity affiliated with the Trump family holds approximately 38% of World Liberty's parent company, and 75% of the proceeds from WLFI token sales go to that entity.

During its first year online, the project received strong backing from Middle Eastern capital, driving token adoption and boosting profits for the Trump family. On the eve of Trump's inauguration, an investment vehicle backed by UAE National Security Advisor Sheikh Tahnoon invested $500 million to acquire a 49% stake in World Liberty, as first reported by The Wall Street Journal. Subsequently, the UAE fund MGX, chaired by Sheikh Tahnoon, used $2 billion worth of USD1 to invest in Binance. Stablecoin issuers typically generate profit by investing user funds into low-risk assets like Treasury bills to earn interest. This transaction directly propelled USD1 into the ranks of top market stablecoins.

In a statement, Binance clarified that MGX selected USD1 as the settlement currency for its investment based on its own independently established commercial standards, and Binance had no involvement in that decision.

Other overseas capital also participated, further driving up project returns. Crypto investor Justin Sun alleged in a lawsuit against World Liberty that he purchased $45 million worth of WLFI tokens.

The project continues to expand, having received preliminary conditional approval from a trust bank earlier this year. If granted a full charter, World Liberty would be able to directly issue USD1; currently, USD1 is issued and managed by BitGo.

World Liberty spokesperson David Wachsman stated, 'Since our inception, we have consistently complied with all U.S. laws and regulations. We proactively applied for a bank charter with the OCC, and once approved, the company will remain subject to federal oversight regardless of which party holds power. It is perplexing for Congress to target a compliant enterprise without justification. This company is dedicated to expanding the utility of the U.S. dollar, while the United States still faces numerous pressing domestic issues.'

The company is recruiting talent from industry giants like Coinbase, Robinhood, and Hidden Road. In August this year, Mack McCain was promoted to Chief Legal and Administrative Officer, after previously serving as Deputy General Counsel for Regulatory Affairs and managing staff at Robinhood.

Project partners are also bolstering their lobbying efforts. BitGo hired the law firm Squire Patton Boggs for the first time in July. That same month, the firm appointed Giancarlo Pellegrini as head of congressional oversight, someone who previously worked for California Democratic Representative Robert Garcia.

Binance and Changpeng Zhao

As the world's largest crypto exchange, Binance was instrumental in getting the USD1 stablecoin off the ground. When MGX initially invested in Binance using USD1, the token had been in existence for less than two months and carried a minimal market cap. Binance also actively promoted USD1 to its platform users without taking a cut from this stablecoin business. In contrast, Circle is required to pay Binance monthly fees tied to the USDC platform's outstanding balance, and Binance itself took a stake in Circle in September.

Former Binance CEO and majority shareholder Changpeng Zhao pleaded guilty, admitting to failures in implementing anti-money laundering controls, and subsequently received a presidential pardon from Trump. Binance paid over $4 billion in fines, and Zhao served four months in a U.S. prison.

Changpeng Zhao, founder of Binance

Bloomberg reported that federal agencies are investigating whether Binance violated sanctions-related regulations, though the DOJ probe does not necessarily guarantee a final prosecution. Simultaneously, the DOJ is verifying whether Binance breached the settlement agreement reached with the U.S. government in 2023.

Earlier this year, Zhao Changpeng hired the PR and lobbying firm Tiger Hill Partners. Co-founder Milan Dalal previously worked on the team of Democratic Senator Mark Warner and served as staff for the Senate Banking Committee. Sources familiar with the matter revealed that Zhao privately hopes to change public perception of his recent pardon and remains highly concerned about the ties between Binance and World Liberty Financial. A spokesperson for Zhao declined to comment.

1789 Capital

Following Trump's reelection in November 2024, Donald Trump Jr. joined 1789 Capital, a venture capital firm centered on an 'anti-woke' ideology. The firm was co-founded by former Bank of America executive Omeed Malik. Bloomberg previously reported that before Trump returned to the White House, 1789 Capital had raised approximately $200 million. Filing documents indicate that its assets under management reached $3 billion this year, covering sectors such as AI, prediction markets, and defense technology. A spokesperson for the firm stated that Donald Trump Jr. is not on the investment committee, whose members include Omeed Malik, co-founder Chris Buskirk, and partner Paul Abrahimzadeh.

Omeed Malik, founder of 1789 Capital

1789 Capital's portfolio has come under Democratic scrutiny. Senior Democratic Representative Jamie Raskin on the House Judiciary Committee sent a letter in August requesting details on the invitation of Donald Trump Jr. to join, along with records of interactions with government officials, paying special attention to two investments: defense contractor Anduril Industries Inc. and rare earth manufacturer Vulcan. Vulcan secured a Department of Defense loan shortly after 1789 Capital's investment.

Lawyers for 1789 Capital replied, stating the letter contained factual errors and misrepresentations: '1789 Capital is willing to accept lawful congressional oversight, but will not be reduced to a tool for partisan political maneuvering.' Responding to media inquiries, a firm spokesperson said the related reports presented no evidence of violations, only false allegations.

Sources revealed that Vulcan Elements hired Marcus Childress, co-head of congressional investigations at Akin Gump. After May this year, Squire Patton Boggs and Invariant also registered to provide lobbying services to this rare earth manufacturer.

A Vulcan spokesperson stated, 'The company adheres to compliant operations and conducts business with integrity, and has never asked investors to help push for the Department of Defense loan announced in November 2025. We have maintained constructive communication with Congress for years and will continue to do so.'

Polymarket and Kalshi

Polymarket and Kalshi, two major prediction markets allowing users to bet on sports, politics, and various events, have become focal points of controversy during Trump's second term. Multiple state regulators have classified them as illegal gambling platforms, yet both are connected to the Trump family. 1789 Capital led Polymarket's latest funding round, valuing the platform at $21 billion post-money.

Donald Trump Jr. simultaneously serves as an advisor to Kalshi. Kalshi is engaged in disputes across various states and with regulators; authorities argue that offering sports betting requires state licenses, whereas Kalshi asserts it falls under federal regulation. This dispute will likely ultimately be resolved by the Supreme Court.

On September 10, 2026, on the second day of the 2026 Republican National Convention held at the American Airlines Center in Dallas, Texas, Donald Trump Jr. delivers a speech on stage

Disclosure documents show that Kalshi hired the FTP team in July, which includes several lobbyists with Democratic backgrounds; Polymarket hired Rob Eskridge in September, who previously worked for Texas Democratic Representative Al Green. Spokespeople for both platforms declined to comment.

Trump Media & Technology Group

Trump Media & Technology Group, the parent company of Truth Social, has recently expanded its business operations everywhere, even negotiating a merger with a nuclear fusion company. Among its initiatives, the most controversial involves selling high-speed data feeds of Trump's account to Wall Street institutions. Trump frequently posts market-moving news on Truth Social covering major policies such as the situation in Iran and tariffs.

Democratic Representative Warner has urged financial institutions not to purchase this service, which can cost up to $100,000 per month. By August, over a dozen institutions had signed up. Bloomberg contacted the company but received no response. Even with a modest client base, this business, named Truth API, can generate millions in annual revenue, despite the company itself operating at a continuous loss. Trump himself is the largest shareholder through a trust managed by Donald Trump Jr., valued at approximately $1 billion in the Bloomberg Billionaires Index.

Two media outlets have already sued Trump, requesting a New York court to halt the service, alleging it 'oversteps boundaries, appears corrupt, and violates the Constitution.'

Meme Coin TRUMP

The meme coin TRUMP was launched by Fight Fight Fight a few days before Trump's inauguration, with the operator's head being Bill Zanker, a long-time collaborator of Trump. The project's official website indicates that Fight Fight Fight allocated 80% of the tokens to CIC Digital LLC, an entity affiliated with Trump, with the tokens unlocking over three years. At current prices, the tokens held by these two entities are valued at approximately $1.49 billion. CIC Digital and Fight Fight Fight also take a cut of the trading fees generated by this meme coin. According to financial disclosures, Trump earned $636 million in related income in the past year alone.

Trump frequently attends offline dinners for major holders of this meme coin, with the next scheduled for November 22 at Trump National Golf Club. The event attracts numerous overseas investors, including Justin Sun, who previously bought World Liberty Financial tokens and attended the previous TRUMP dinner, though he later fell out with World Liberty.

Last year, Senator Richard Blumenthal sent a letter specifically regarding the TRUMP meme coin, requiring Fight Fight Fight to submit ownership and investor documentation.

American Ventures

Donald Trump Jr. and Eric Trump have invested in the investment firm American Ventures, positioning it in multiple public companies with a focus on government-subsidized sectors like defense and critical minerals. Securities filings show the two participated in transactions related to a tungsten mine in Kazakhstan. The project entity, Cove Kaz Capital Group, stated that the U.S. Export-Import Bank has preliminarily expressed interest, potentially providing up to $900 million in financing for this large undeveloped tungsten mining project in Kazakhstan.

On August 8, 2026, Eric Trump watches a match during the third day of the LIV Golf New York tournament held at Trump National Golf Club in Bedminster, New Jersey

American Ventures also invested in a golf operations company, which later announced a merger with a drone manufacturer, driving its stock price up. This drone company, named Powerus, secured an $82 million government order for anti-drone systems. American Ventures was established by the investment bank Dominari Holdings Inc., with both Donald Trump Jr. and Eric Trump holding minority stakes in the bank. A spokesperson for Dominari did not respond to interview requests.