Original title: How the Trump family is poised to profit from a $2 billion Middle East crypto deal that uses their stablecoin
Original authors: LEO SCHWARTZ, BEN WEISS
Original article translated by BitPush
The relationship between President Trump and his family with cryptocurrency is becoming increasingly close. The latest example occurred last week when Trump's son, Eric Trump, announced that the UAE venture capital firm MGX would use the stablecoin issued by World Liberty Financial (a blockchain company owned by the Trump family) to pay for its $2 billion investment in the cryptocurrency trading platform Binance.
The Trump family and their business partners are expected to profit from this transaction, but the exact amount is difficult to determine due to a lack of transparency in the details. Binance did not respond to requests for comment, and World Liberty Financial's spokesperson also refused to provide more details beyond publicly available information.
Despite limited information disclosure, (Fortune) has provided an upper estimate of potential profits for the Trump family by interviewing experts in the stablecoin field and analyzing the current crypto ecosystem.
The business of stablecoins: large and invisible
Stablecoins are the latest link in Trump's expanding crypto empire, but they have long been an integral part of the crypto industry. Tether, Circle, and later PayPal and Ripple have made a fortune by issuing stablecoins. Tether's revenue for the most recent quarter reached $5.6 billion, and Circle's total revenue for 2024 also reached $1.7 billion.
For this reason, World Liberty Financial issued its own dollar stablecoin USD1 in late March this year. Like most dollar-pegged stablecoins, USD1 is backed by short-term government bonds and other dollar-like assets, typically generating about 4% annualized returns—most of which usually belongs to the issuing entity.
If Binance holds USD1, then World Liberty Financial would earn interest on the reserve assets behind it, which, at 4%, could yield up to $80 million in a year. However, this figure is subject to great variability. For example, if World Liberty exclusively enjoys all interest income, Binance would have no incentive to hold USD1 long-term and might exchange it for BNB or other income-generating assets.
Additionally, according to a spokesperson, the reserve assets of USD1 consist of various "cash equivalents" in addition to government bonds. However, World Liberty has not disclosed the specific asset composition, so there may be cash components that do not generate returns.
Omid Malekan, a crypto scholar at Columbia Business School, pointed out that MGX may not have actually sent funds to Binance yet; if Binance directly liquidates USD1 upon receipt, World Liberty would earn no interest. Furthermore, Binance might use these USD1 for trading settlements on the platform or for employee salary payments. Edward Woodford, co-founder and CEO of Zero Hash (a stablecoin infrastructure provider), also stated: "Suppliers and employees need to be paid, so these tokens could be quickly destroyed." ("Destroying" refers to exchanging stablecoins for cash back from the issuer.)
Could Binance be getting a share?
Todd Phillips, a law professor at Georgia State University, pointed out that Binance may have signed some profit-sharing agreement with World Liberty Financial. He cited an example where Binance previously reached a similar agreement with Circle, which, in addition to paying a one-time fee of $60 million, also paid Binance monthly fees for promoting USDC and committed to keeping some funds in that stablecoin.
If Binance and World Liberty have such cooperative arrangements, the latter's earnings could shrink significantly, but its stablecoin's liquidity and market visibility would be greatly enhanced. Binance previously partnered with stablecoin issuer Paxos to launch BUSD, but that coin was halted by regulators in early 2023. USD1 is currently mostly issued based on Binance's own blockchain.
"Why USD1?" Malekan said, "Maybe they just gave Binance the best partnership terms." In summary, while theoretically the Trump family could profit $80 million through USD1, this also depends on whether the token will be destroyed or if profits need to be shared.
Democrats retaliate: "Naked conflict of interest"
Regardless of the specific agreements between Binance and World Liberty, Democratic lawmakers have viewed this transaction as new evidence of a conflict of interest between the Trump family and the crypto industry. Senior Democratic member of the House Financial Services Committee, Congresswoman Maxine Waters of California, angrily walked out of a blockchain hearing on Tuesday to protest the Trump family's profit-making while participating in regulatory legislation.
In a statement sent to (Fortune), she expressed: "I am extremely concerned that Republicans not only turn a blind eye to Trump's corruption but even assist him and his family in legitimizing their self-serving behavior with cryptocurrency." This controversy has also affected the (stablecoin regulation bill) that originally garnered bipartisan support in Congress. A group of Democratic senators who had previously supported the bill collectively opposed the latest version last weekend, citing concerns about Trump's connections with USD1.
Massachusetts Senator Elizabeth Warren bluntly stated: "This is naked corruption, and no senator should support it."
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