Eric Trump has agreed to step back from management decisions at World Liberty Financial’s proposed national trust bank, a move designed to address regulatory concerns about the Trump family’s influence over a federally chartered institution as the crypto venture navigates the approval process.
Trump, World Liberty co-founder Zak Folkman, and Emirati investor Hamad Khalfan Ali Matar Alshamsi each signed separate commitments through companies connected to them that would keep all three away from bank management decisions. The agreements, known formally as passivity commitments, became public when World Liberty received preliminary approval from the Office of the Comptroller of the Currency late last week.
The commitments are aimed squarely at the optics of a sitting president’s son and a foreign investor with ties to Abu Dhabi’s royal family holding sway over a U.S. federal deposit bank. Lawyers familiar with the filing noted that the combination of a presidential family member and an overseas backer makes this application materially different from other crypto banking charter requests.
World Liberty spokesman David Wachsman framed the arrangement as evidence the company is seeking maximum regulatory scrutiny rather than avoiding it. “World Liberty is intentionally running towards regulation and permanent supervision, not away from it,” Wachsman said. “Before full approval and for many years afterward, the World Liberty Trust Company will fully cooperate with the OCC, a federal regulator, and will adhere to all other applicable laws and regulations.”
If the federal charter is granted, World Liberty would be able to internally hold the reserves backing its dollar-pegged stablecoin USD1, which has reached nearly $4 billion in market capitalization, according to CoinGecko. That would allow the company to manage issuance and reserve custody under one roof rather than relying on third-party arrangements.
Legal Shadows Loom Over the Charter Bid
The transparency push comes as World Liberty faces an unresolved lawsuit from Justin Sun, the founder of the Tron blockchain and the project’s largest external investor with $75 million committed. Sun filed suit in April, alleging the company froze his tokens, stripped his governance voting rights, and threatened to permanently destroy his holdings.
World Liberty responded with a defamation complaint accusing Sun of orchestrating a smear campaign after breaching his own contractual obligations. Both cases remain active, and a federal judge declined to send Sun’s claims to private arbitration, keeping the dispute in open court.
Adding to the scrutiny, an April investigation revealed World Liberty had deposited roughly $5 billion worth of its own WLFI tokens on the Dolomite lending platform as collateral to borrow approximately $75 million in stablecoins. The structure drew immediate comparisons to the circular leverage schemes that preceded the collapse of FTX, with critics warning that using a self-issued token as collateral for external borrowing creates dangerous feedback loops. Hunter Biden has publicly denounced the arrangement as a blatant conflict of interest.
A Regulator in Pro-Crypto Mode
The World Liberty application is landing in a dramatically different regulatory climate than existed two years ago. Jonathan Gould, the current Comptroller of the Currency, has made approving new banking charters a stated priority since taking office, a sharp departure from the Biden administration’s more cautious approach to digital-asset firms.
CompanyCharter StatusYearRippleConditional trust bank approval2025PaxosConditional trust bank approval2025Fidelity Digital AssetsConditional trust bank approval2025Coinbase (COIN)Conditional trust bank approval2026World Liberty FinancialPreliminary approval2026
Note: Conditional approvals give companies a pathway toward operating regulated trust banks, but full authorization requires meeting additional federal requirements.
The broader policy shift extends beyond the OCC. Donald Trump met with top executives from crypto companies at the White House on Wednesday, while the Securities and Exchange Commission works to finalize a comprehensive regulatory framework for the industry.
World Liberty’s ownership structure has drawn heightened attention compared to other crypto bank proposals. The company reached an agreement before Trump took office to sell 49 percent ownership to a business associated with Sheikh Tahnoon bin Zayed, brother of the UAE president. Trump and his family also hold financial interests in the venture, though the company maintains that none of them serve as officers, directors, or employees.
Federal charter reviews involve detailed examinations of organizers’ and directors’ finances. World Liberty’s filing lists Zach Witkoff, son of presidential envoy Steve Witkoff, along with Scott Alper, an executive at the Witkoff Group, and Robert Witkoff, Steve’s brother.
The White House has rejected claims that Trump’s business interests constitute a conflict of interest or that he has used presidential authority to enrich himself.
World Liberty still faces several hurdles before the charter is finalized. Regulators must determine whether the company can bring USD1’s reserve operations inside a federally supervised banking entity, a decision that will test whether the passivity commitments are sufficient to insulate the bank from the political and legal turbulence surrounding its backers.