On the Eve of Midterms, Trump-Linked Crypto Firms Rush to Build Legal Defenses

By Annie Massa and Olga Kharif, Bloomberg

Translated by Luffy, Foresight News

Companies linked to President Donald Trump and his family are hiring lawyers and lobbyists because Democrats have threatened to launch a full-scale investigation if they win either chamber of Congress in the midterm elections.

Several people familiar with the matter said polls and prediction markets are leaning Democratic. The companies tied to the Trump family, spanning crypto projects, venture capital firms and prediction-market platforms, have already begun preparing in advance for congressional inquiries.

Companies and individuals associated with the Trump family, including prediction-market platforms such as Polymarket and Kalshi, rare-earth manufacturer Vulcan Elements Inc., and crypto leader Changpeng Zhao, who received a presidential pardon, have begun retaining prominent lobbyists and lawyers—some of whom have close ties to Democratic lawmakers—to brace for an anticipated storm of public scrutiny.

U.S. President Donald Trump speaks with reporters on the White House South Lawn

Trump and his family have publicly insisted that all their business activities are fully legal. But the companies' concentrated hiring of well-paid legal and lobbying teams indicates that the companies' boards are actively preparing to respond. Democratic lawmakers have previously stated clearly that they intend to focus on investigating lucrative dealings between government policy and the president's personal business interests.

Sean Clerget, a senior partner at the Kozan O'Connor law firm who advises clients on congressional investigations, said: “These companies have already begun assessing their own risks, thinking in advance about how to handle inquiry letters, and refining their public messaging and response plans. For business ventures involving government officials and their families, Democrats have made very clear how they want to scrutinize them.”

Democrats have already identified a group of Trump family-affiliated companies as investigation targets: they have sent letters requesting documents to World Liberty Financial, the crypto platform co-founded by Trump and his son, and to 1789 Capital, the venture capital firm in which Donald Trump Jr. is a partner, while also looking at companies in 1789 Capital's portfolio, including Vulcan. Democrats have also written to the Justice Department to ask about the details of the pardon for Binance co-founder Changpeng Zhao. Binance previously helped a company in which the president holds an equity stake develop a stablecoin. A Binance spokesperson said the company only provided World Liberty with standard services such as listing, which it also offers to many other projects.

Democratic Senator Richard Blumenthal of the Senate Judiciary Committee said: “We will scrutinize one by one any projects or business arrangements that raise suspicions of illegality or conflicts of interest.”

Investigation Could Face Multiple Obstacles

Democrats' current inquiries are focused on determining whether companies in Trump's inner circle obtained special government contracts or policy advantages. Rep. Suhas Subramanyam, a Democrat on the House Ethics Committee, said that if Democrats win a majority and gain subpoena power, they will dig into transactions for which there is concrete evidence of misconduct.

But such investigations are unlikely to proceed smoothly. Some records are held overseas: World Liberty Financial received a $500 million investment from entities controlled by Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan, a deal Democrats have already singled out. And Congress has limited authority, making it difficult to compel overseas individuals to testify or produce documents.

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

In addition, the investigation may not ultimately uncover wrongdoing. All companies associated with Trump have claimed that their partnerships and business models comply with legal requirements. Democratic Senator Ron Wyden launched a conflict-of-interest investigation as early as 024 into Jared Kushner's $6 billion private equity firm Affinity Partners, but no criminal or civil action was ultimately brought.

Many legal experts believe that the Justice Department has been deferential to Trump's personal wishes during his second term and is highly unlikely to prosecute his business allies. After years of investigations, Trump and his family are well aware that the president has broad legal protections and pardon powers. Noelle Acheson, a contributor to the Crypto is Macro Now blog, said: 'Even if Democrats take both chambers, they cannot eliminate the factors currently blocking the Justice Department, the Treasury Department, and the SEC from launching investigations.'

People familiar with the matter said that in private communications, Donald Trump Jr. is not worried about congressional investigations, believing Democratic attacks would actually boost his support. A spokesperson for Donald Trump Jr. declined to comment, and representatives for Eric Trump did not respond to requests for comment. Trump's two sons have publicly stated that, as private citizens, they have the right to serve as corporate advisors and participate in investments.

White House spokesperson Lauren Bis said in a statement: 'Democrats have no plan to improve people's lives; their only goal is to continue the decade-long political persecution of President Trump.'

'The core objective is to provoke opponents'

However, Democrats are likely to focus their 2028 presidential campaign on contrasting themselves with Trump. Aaron Cutler, head of government relations and public affairs at Hogan Lovells, believes the investigation itself is politically motivated. 'For this group of Democratic lawmakers, the highest objective is to provoke and annoy Trump and cause trouble for people around him.'

Congressional investigations must nominally serve a legislative purpose; otherwise, they risk accusations of using taxpayer money for partisan fights. However, most Democrats believe that laying out the extensive evidence that the president has used power for personal gain would create a stark contrast with ordinary voters struggling to make ends meet. New Mexico Rep. Melanie Stansbury said: 'There is no disagreement among Democrats on this issue; everyone wants to stop misconduct and hold this administration accountable.'

The following Trump family-affiliated businesses have come under scrutiny, and many expanded their legal and lobbying teams before the midterm elections:

World Liberty Financial

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

The project launched two tokens: WLFI and USD1, a dollar-pegged stablecoin. Both assets can generate revenue for the Trump family. A Trump family-affiliated entity holds about 38% of World Liberty's parent company, and 75% of the proceeds from WLFI token sales go to that entity.

During its first year, the project received strong backing from Middle Eastern capital, driving token adoption and increasing the Trump family's earnings. Just before Trump's inauguration, an investment vehicle backed by UAE National Security Advisor Sheikh Tahnoon invested $500 million for a 49% stake in World Liberty, as first reported by The Wall Street Journal. Afterward, MGX, a UAE fund chaired by Sheikh Tahnoon, used $2 billion worth of USD1 to take a stake in Binance. Stablecoin issuers typically generate revenue by deploying user funds into low-risk assets such as Treasury bills to earn interest. That transaction directly propelled USD1 into the top tier of the stablecoin market.

Binance said in a statement that MGX selected USD1 as the settlement currency for its investment in Binance based on its own independently developed business standards, and that Binance did not participate in the decision.

Other overseas capital also participated in investments, further boosting the project's returns. Crypto investor Justin Sun said in a lawsuit against World Liberty that he had purchased $45 million worth of WLFI.

The project is also continuing to expand and this year received preliminary conditional approval for a trust bank. If it obtains a full license, World Liberty could issue USD1 directly; currently, USD1 is issued by BitGo on its behalf, with BitGo managing the reserves.

World Liberty spokesperson David Wachsman said: 'Since our inception, we have complied with all U.S. laws and regulations. We proactively applied to the OCC for a bank charter. Once the charter is granted, the company will remain subject to federal oversight regardless of which party is in power. It is baffling for Congress to target a compliant company without any basis. This company is working to expand access to the U.S. dollar, while the United States still has many pressing issues affecting people's livelihoods.'

The company has hired talent from industry leaders such as Coinbase, Robinhood, and Hidden Road. In August this year, Mack McCain was promoted to Chief Legal and Administrative Officer. He previously served as Deputy General Counsel for Regulatory Affairs and Chief of Staff at Robinhood.

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

Binance and Changpeng Zhao

The world's largest crypto exchange, Binance, has been a key enabler in the launch of the USD1 stablecoin. When MGX used USD1 to invest in Binance, USD1 had been on the market for less than two months and had a very low market cap. Binance has also promoted USD1 to platform users and does not take a cut from this stablecoin business. By comparison, Circle must pay Binance a monthly fee share tied to USDC platform balances, and Binance itself invested in Circle in September.

Binance's former CEO and largest shareholder, Changpeng Zhao, pleaded guilty, admitting that the company had failed to implement anti-money laundering risk controls, and later received a Trump pardon. Binance paid more than $4 billion in fines, and Changpeng Zhao served 4 months in a U.S. prison.

Changpeng Zhao, Binance founder

Bloomberg reported that federal agencies are investigating whether Binance violated sanctions-related regulations. A Justice Department investigation may not necessarily lead to prosecution. The DOJ is also examining whether Binance breached its 2023 settlement agreement with the U.S. government.

Earlier this year, Changpeng Zhao retained public relations and lobbying firm Tiger Hill Partners. Its co-founder, Milan Dalal, previously served on the staff of Democratic Sen. Mark Warner and was also a staffer on the Senate Banking Committee. People familiar with the matter said Changpeng Zhao privately hopes to change how his pardon is perceived and is particularly concerned about the ties between Binance and World Liberty Financial. A spokesperson for Changpeng Zhao declined to comment.

1789 Capital

After Trump's reelection in November 2024, Donald Trump Jr. joined 1789 Capital, a venture capital firm that emphasizes an 'anti-woke' philosophy. The firm was co-founded by former Bank of America executive Omeed Malik. Bloomberg previously reported that 1789 Capital had raised about $200 million before Trump returned to the White House. Filings show that its assets under management reached $3 billion this year, with investments spanning AI, prediction markets, defense technology, and other sectors. A firm spokesperson said Donald Trump Jr. is not on the investment committee, whose members are Omeed Malik, co-founder Chris Buskirk, and partner Paul Abrahimzadeh.

Omeed Malik, founder of 1789 Capital

1789 Capital's investment portfolio has come under Democratic scrutiny. Jamie Raskin, the senior Democrat on the House Judiciary Committee, sent a letter in August asking the firm to explain the details of Donald Trump Jr.'s invitation to join and its communications with government officials, with particular focus on two investments: defense company Anduril Industries Inc. and rare-earth producer Vulcan. Vulcan received a Department of Defense loan after 1789 Capital invested in it.

1789 Capital's attorneys sent a response letter stating that the letter contained factual errors and misrepresentations: '1789 Capital is willing to accept lawful congressional oversight, but will not become a tool of partisan political gamesmanship.' A spokesperson for the firm said in an interview that the reports had produced no evidence of wrongdoing, only unfounded allegations.

People familiar with the matter said Vulcan Elements has retained Marcus Childress, co-head of congressional investigations at Akin Gump. Since May this year, Squire Patton Boggs and Invariant have also registered to provide lobbying services to the rare-earth producer.

A Vulcan spokesperson said: 'The company is committed to compliance and integrity in its business, and has never asked investors to help advance the Department of Defense loan announced in November 2025. We have maintained constructive communication with Congress for many years and will continue to do so.'

Polymarket and Kalshi

Polymarket and Kalshi, two major prediction markets that allow users to bet on sports, politics, and various events, have become a focus of controversy during Trump's second term. Multiple state regulators have determined that they are illegal gambling platforms, and both platforms are linked to the Trump family. 1789 Capital led Polymarket's most recent funding round, at a post-money valuation of $21 billion.

Donald Trump Jr. also serves as an adviser to Kalshi. Kalshi is battling states and regulators, who argue that it needs state licenses to offer sports betting; Kalshi contends that it is subject to federal regulation, and the dispute will likely ultimately be decided by the Supreme Court.

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

Disclosure filings show that Kalshi retained the FTP team in July, which includes several lobbyists with Democratic ties; Polymarket retained Rob Eskridge in September, who previously worked for Texas Democratic Rep. 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 been expanding into various businesses, even discussing a merger with a nuclear fusion company. One of its most controversial offerings: selling Wall Street firms a high-speed information feed interface for Trump's account. Trump frequently posts market-moving news on Truth Social, involving major policy issues such as the Iran situation and tariffs.

Democratic Sen. Warner urged financial institutions not to purchase the service, which can cost up to $100,000 per month. As of August, more than a dozen institutions had signed contracts. Bloomberg contacted the company but received no response. Even with a relatively small client base, the business called Truth API can generate millions in annual revenue, while the company itself continues to lose money. Trump himself is the company's largest shareholder through a trust managed by Donald Trump Jr., and the stake is valued at about $1 billion on the Bloomberg Billionaires Index.

Two media outlets have sued Trump, asking a New York court to halt the business, calling the service 'crosses the line, raises corruption concerns, and violates the Constitution.'

Meme coin TRUMP

The meme coin TRUMP was launched by Fight Fight Fight a few days before Trump's inauguration, and the head of its operator is Bill Zanker, a longtime Trump associate. The project's website shows that Fight Fight Fight allocated 80% of the tokens to CIC Digital LLC, a Trump-affiliated entity, with the tokens vesting over three years. At current prices, the tokens held by the two entities are worth a combined $1.49 billion. CIC Digital and Fight Fight Fight also receive a share of the meme coin's trading fees. According to financial disclosures, Trump received $636 million in related income last year alone.

Trump has frequently attended offline dinners for whales of this meme coin; the next dinner is scheduled for November 22 at Trump National Golf Club. The event has attracted many overseas investors, including Justin Sun, who previously bought World Liberty Financial tokens and attended the previous TRUMP dinner, but later had a dispute with World Liberty.

Last year, Senator Richard Blumenthal sent a letter regarding the TRUMP meme coin, requesting that Fight Fight Fight submit ownership and investor information.

American Ventures

Donald Trump Jr. and Eric Trump invested in American Ventures, an investment firm with positions in multiple listed companies, focusing on sectors such as defense and critical minerals that can receive government support. Securities filings show that the two participated in transactions related to a tungsten mine in Kazakhstan. Cove Kaz Capital Group, the project entity, said the U.S. Export-Import Bank has preliminarily expressed interest in providing up to $900 million in financing for the large undeveloped tungsten project in Kazakhstan.

On August 8, 2026, Eric Trump watches the competition during day three of LIV Golf New York 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 share price higher. The drone company, named Powerus, has secured an $82 million government counter-drone order. American Ventures was established by investment bank Dominari Holdings Inc., and Donald Trump Jr. and Eric Trump both hold minority stakes in the investment bank. A spokesperson for Dominari did not respond to a request for comment.

Source: TechFlow