A company controlled by the UAE’s ruling family has agreed to conduct a $2bn transaction using a stablecoin launched by US President Donald Trump’s sons, raising concerns about a conflict of interest between the president and a powerful Gulf state.
“We are excited to announce today that USD1 has been selected as the official stablecoin to close MGX’s $2bn investment in Binance,” Zach Witkoff, a co-founder of the Trump family’s firm, World Liberty Financial, announced on Wednesday at a crypto conference in Dubai.
Zach is the son of Trump’s Middle East envoy, Steve Witkoff.
World Liberty Financial is owned by a Trump family corporate entity. Zach and President Trump’s son Eric, however, have become the most public faces of the firm, appearing at crypto events in the Gulf.
The announcement is a major boost for the Trump family’s cryptocurrency startup.
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It also signals how deeply entwined the US president’s family has become with rulers in the oil-rich Gulf.
MGX and UAE’s ruling al-Nahyan
MGX is a technology investment firm founded by Abu Dhabi sovereign wealth fund Mubadala Investment and AI firm G42. MGX is chaired by the UAE’s powerful national security adviser, Sheikh Tahnoon bin Zayed al-Nahyan, who also controls G42 as part of a sprawling $1.5 trillion investment empire.
The deal is an unprecedented example of a sitting US president’s family doing business with a foreign government. It is all the more remarkable for being announced so openly by the son of the US president’s top global emissary.
There are dozens of stablecoin companies competing to be used in big transactions, which can boost their appeal and credibility with users. Stablecoins are a form of digital cash that track the price of a sovereign currency, usually the US dollar. The Trump family’s stablecoin, USD1, is dollar-pegged.
Stablecoin companies make money by taking deposits from users and giving them stablecoins in return. The deposits are then reinvested, usually in US dollar-denominated assets like treasuries.
‘This is corruption’
Trump’s cryptocurrency venture was already a lightning rod issue, raising complaints about conflicts of interest. The UAE’s massive investment in the deal has only fuelled concerns.
Democratic Senator Elizabeth Warren, the ranking member of the Senate Banking, Housing, and Urban Affairs Committee, slammed the deal on Thursday.
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“A shady fund backed by a foreign government just announced it will make a $2 billion deal using Donald Trump’s stablecoins. Meanwhile, the Senate is gearing up to pass the “GENIUS” Act – stablecoin legislation that will make it easier for the President and his family to line their own pockets. This is corruption and no senator should support it,” she wrote.
Democratic Senator Chris Murphy said that Trump’s crypto venture was “corrupt on its face, but it’s likely illegal if any prosecutor worth their salt was trying to scratch the surface”.
“The president of the US shouldn’t be running a backdoor bribery scheme,” he said.
The UAE isn’t the only Gulf state shelling out deals with the Trump family ahead of the president’s visit to the region between 13-16 May.
On Wednesday, Qatari Diar, a government-administered real estate firm in Doha, announced it is partnering with the Trump Organization to build the Trump International Golf Club and villas in Simaisma, a resort town some 30 kilometres north of the Qatari capital, Doha.
