Topline
MGX, a state-backed Abu Dhabi fund, told Forbes it chose the Trump-linked USD1 stablecoin to settle its $2 billion investment in Binance based on factors such as business suitability, the currency of the backing assets and “compliance history”—though USD1 was brand new at the time.
An LLC connected to President Donald Trump and members of his family owns about 38% of World Liberty Financial, the issuer of USD1, a stablecoin pegged to the U.S. dollar and backed by U.S. Treasuries and cash equivalents.
In May, World Liberty Financial co-founder Zach Witkoff said MGX, a state-backed Abu Dhabi investment fund, was using $2 billion worth of USD1 to invest in Binance, the world’s largest crypto exchange by trading volume.
In a statement to Forbes on Wednesday, MGX shared its rationale for using USD1—an explanation that does not appear to have been reported previously.
Binance requested the deal be settled in cryptocurrency, MGX chief communications officer Noelle Camilleri said, calling it “consistent with our shared desire to expand the validated use cases for cryptocurrencies.”
The parties opted for a stablecoin given the volatility of other options and selected USD1 because it is “backed 1:1 by a conservative mix of U.S. dollar-denominated assets, including cash deposits, highly liquid short-term government securities and other secure equivalents, all held and managed by an independent, U.S.-based custodian in externally audited custodial accounts,” MGX said.
MGX said it does not currently hold USD1 and paid no fees to World Liberty Financial, nor has it invested in the company
MGX announced its $2 billion Binance investment on March 12, while World Liberty Financial didn’t unveil USD1 until March 25—meaning the token had little compliance history available to assess.
World Liberty Financial says it was “inspired by the vision of Donald J. Trump” and lists him as its co-founder emeritus, alongside co-founders Donald Trump Jr., Eric Trump and Baron Trump. An LLC affiliated with Trump and some family members owns about 38% of World Liberty Financial, per the small print on its website. Stablecoin issuers like World Liberty Financial typically earn money by investing the dollars backing their coin in safe assets like U.S. Treasurys, keeping the interest. MGX’s decision to use USD1, instead of fiat or another cryptocurrency, effectively gave World Liberty Financial $2 billion to invest in U.S. government-backed money markets. That transaction also boosted USD1’s market cap, helping it gain legitimacy and scale. That means an investment fund backed by a foreign state may have directly increased the Trump family’s earnings while Donald Trump was in the White House.
Trump can earn income from his businesses while in office through the Donald J. Trump Revocable Trust, the same structure he used during his first term. He is its sole donor and beneficiary, with Donald Trump Jr. serving as the trustee. In an April regulatory filing in the United Kingdom, the Trump Organization confirmed Trump retains control over his businesses. As president, he has pledged to make the United States the “crypto capital of the world,” aligning with his expanding interests in digital assets.
$2.7 billion: USD1’s market cap as of 11 a.m. EDT on Thursday, making it the sixth-largest stablecoin, according to CoinGecko, a crypto analytics firm.
After MGX’s use of USD1 became public, Sen. Richard Blumenthal, D-Conn., joined by 11 other Democrats and Sen. Bernie Sanders, I-Vt., filed a resolution to enforce the Constitution’s foreign emoluments clause, which bars presidents from “accept[ing] of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State” without Congress’ consent. Senate Republicans blocked the measure. Sens. Jeff Merkley, D-Ore., and Elizabeth Warren, D-Mass., wrote to Binance and MGX, asking why they settled the transaction in USD1 rather than fiat or another cryptocurrency. Any responses have not been made public. The senators also pressed the Office of Government Ethics to weigh in. That office has not responded to their request.
While Camilleri said MGX does not currently hold USD1, she did not answer a question about whether or not it plans to use the stablecoin for future investments.
MGX’s $2 billion deal is the single largest investment in a crypto company, the largest investment ever paid in crypto and Binance’s first institutional investment, according to the crypto exchange.
Binance now holds about $2 billion worth of USD1—about 75% of the stablecoin’s market cap. It did not respond to an inquiry about its plans for the USD1.
Trump’s net worth has jumped about $3 billion over the past year, according to Forbes’ estimates, largely on the back of his presidency. The surge has been driven less by real estate or his golf clubs than by the soaring value of his crypto-linked ventures. On his latest financial disclosure—covering a period before USD1 launched and its WLFI tokens were nontransferable—Trump reported $57.4 million in income from World Liberty Financial.
MGX is joining Oracle and private-equity firm Silver Lake to buy a roughly 45% stake in TikTokUSA, CNBC reported last week, citing unnamed sources. Asked about the talks, Camilleri told Forbes, “On TikTok, we don’t have anything to share at this time.”
Forbes estimates Donald Trump is worth about $7.2 billion.
The Web Of Billionaire Pals, Partners And Trump Supporters Taking Control Of TikTok U.S. (Forbes)
Trump’s Crypto Firm Raised $52 Million—Likely Sending Millions To His Family, New Disclosure Reveals (Forbes)
President Trump’s Crypto Firm Expands Relationship With Embattled Blockchain Billionaire (Forbes)
‘We’d Call That Corruption’: How Trump Used The Presidency To Expand His Global Empire (Forbes)
Here’s How Much The Trump Kids Have Made Because Of The Presidency (Forbes)