Statement: AFREF Denounces World Liberty Financial Conditional Bank Charter Approval

Statement of Patrick Woodall, managing director at Americans for Financial Reform Education Fund

The Office of the Comptroller of the Currency (OCC) exceeded its statutory authority and longstanding judicial precedent to unlawfully grant a conditional bank charter to a trust bank controlled by the Trump family crypto firm World Liberty Financial (WLF). The rush to bestow the special powers of bank charters on crypto firms dangerously blurs the congressionally mandated barrier between banking and commerce, posing considerable risks to customers and the stability of the financial system that could lead to public bailouts of foundering crypto banks. 

This is just another example of the crypto industry’s demand to access all of the benefits of the mainstream financial system without complying with the statutory obligations or requirements for banks. The OCC should have rejected the application because WLF Trust will not fulfill the fiduciary requirement for trust bank charters or based on WLF’s business relationships with convicted money-launderers (some subsequently pardoned by Trump) and foreign investors, including a 49 percent stake by a United Arab Emirates sovereign wealth fund that also has two board seats on the WLF parent company. Today’s approval follows the OCC’s rubber-stamping of the Coinbase, Ripple, Paxos, and other crypto bank applications.

Granting a bank charter to the First Family’s crypto firm poses unprecedented risks because it creates insurmountable conflicts of interest—starting with the OCC’s inability to reject the WLF charter application. This is another destabilizing step continuing the crypto corruption that has become a hallmark of this White House. The Trump OCC cannot credibly or impartially supervise or examine the Trump family crypto bank, make sure it operates safely and soundly, maintain adequate reserves for the Trump stablecoin, or protect customers from unfair or deceptive practices. 

This decision is perilous. The Trump family will capture the benefits of a bank charter but leave customers, the economy, and the public bearing all of the risks. Granting this charter threatens  financial stability— with conflicted regulators unwilling or unable to act—while inevitably enriching the Trump family crypto empire. The endemic crypto volatility, fraud, crime, and corruption will only become further entrenched in the financial system, increasing the risks of another financial crisis.

Americans for Financial Reform Education Fund filed extensive comments opposing the WLF charter application last year. 

###