World Liberty Financial Inc , founded by the Witkoff family two months before November’s U.S. election with Trump as a financial beneficiary , presents concerns over ethics and conflicts of interest, say six specialists in U.S. government ethics.

Among their biggest concerns is World Liberty’s new partner: Tron crypto platform.

Quicker and cheaper than Bitcoin, the Tron network has overtaken its rival as a vehicle for crypto transfers associated with groups designated as terror organizations by Israel, the United States and other countries, Reuters reported in 2023 , citing interviews with seven financial crime experts and cryptocurrency investigations specialists.

Tron announced last month it was investing $30 million in World Liberty. Tron’s founder, Chinese-born entrepreneur Justin Sun, will join the Trump-Witkoff venture as an advisor, Sun and World Liberty said on social media platform X. The British Virgin Islands-registered Tron is now World Liberty’s largest investor, Sun said.

Crypto seizures announced by the Israeli security services since 2021 have frequently singled out Tron’s use by militants, including Hamas whose 2023 attack on Israel killed 1,200 people, according to Israeli authorities, and triggered the Gaza war.

Israel s National Bureau for Counter Terror Financing (NBTCF), which is responsible for such seizures, froze 186 Tron wallets since July 2021, saying they were used by a "designated terrorist organization" or for a "severe terror crime." Of those, Israeli authorities linked 84 Tron wallets to Hamas or Hamas allies, including Islamic Jihad, 39 to Hezbollah and 63 to unspecified terrorist groups or money changers. The most recent Tron seizure was announced on March 28.

Reuters could not independently determine Tron’s use by militant groups, and the NBTCF did not provide evidence for its assertions or respond to requests for more details. Hamas and Hezbollah did not respond to requests for comment.

Tron, which profits from transaction fees on its network, told Reuters its technology “has attracted both lawful users and those with illicit motives” but did not specifically respond to claims it has been used by militants. The company “has taken proactive measures to address the risk of illicit activities on its network,” a Tron spokesperson said in response to questions for this story. A collaboration with law enforcement launched in September froze $70 million in illicit funds, the spokesperson said. Sun, the founder, did not respond to a request for comment.

On the sidelines of a crypto conference in Abu Dhabi, Eric Trump told Reuters that the use of crypto by criminal groups was “everybody’s foremost concern” but said traditional financial institutions were also used to funnel “bad money.” “Anything can be manipulated if used by the wrong people, and you have to crack down on it,” Trump’s second son said, adding that the crypto industry will do “a great job” of policing itself when it comes to illicit flows.

The U.S. Treasury Department has also seized Tron wallets, including an account linked to a group that the department said raised money for Hamas in the wake of the 2023 attack on Israel. In March, the Treasury leveled sanctions against a Lebanon-based money changer who it said provided Hezbollah officials with crypto accounts, including a Tron wallet, to receive funds from Iran.

Tron’s investment in World Liberty raised concerns among among ethics experts.

"There are red flags all over this,” said Kathleen Clark, a professor at Washington University in St. Louis who specializes in government ethics. Her concerns include the significant size of Tron’s investment in World Liberty, whether Trump could benefit financially from it and the alleged use of Tron by militants including Hamas and Hezbollah.

She also highlighted an investigation of Tron founder Sun by the U.S. Securities and Exchange Commission. In 2023, the SEC charged Sun with fraud, accusing him of artificially inflating trading volume and concealing payment to celebrities to promote his companies. Sun, who is based in Switzerland and is a citizen of Grenada, said the SEC charges “lack merit.” The case is ongoing.

Clark questioned whether World Liberty’s close relationship with Sun would pose a conflict of interest for Trump once his administration takes over the SEC in January.

Spokespeople for Trump and his transition team did not directly respond to questions about Trump’s financial ties to World Liberty, the Tron investment and potential conflicts. "President Trump didn t get into politics for profit,” said transition spokesperson Karoline Leavitt. “He s fighting because he loves the people of this country and wants to make America great again.”

Militant groups and criminals like Tron because it gives users the option to conceal their identities, charges low fees and can be converted into cash easily, according to some crypto experts.

POTENTIAL CONFLICTS

Witkoff co-founded World Liberty and has a stake in a company -- WC Digital Fi, LLC -- that is entitled to some of World Liberty s revenues, according to the company s terms. He is a close friend of Trump’s and a donor to his Republican presidential campaign.

He plans to put all his investments in a “blind trust,” said a person familiar with Witkoff’s plans who declined to be identified. The source, however, said Witkoff would retain ownership of his assets. Typically, in a blind trust, an outside manager controls an official s assets, selling off those that pose a conflict and reinvesting the proceeds into investments unknown to the owner.

Witkoff declined to comment. World Liberty did not respond to requests for comment about potential ethical issues and Tron’s investment in the company.

Even with a trust, World Liberty sets up potential conflicts of interest, the ethics specialists told Reuters.

Witkoff s Middle East policy recommendations could be affected by what he sees as best for World Liberty as opposed to the United States, they said. Even if Witkoff sets up a trust and isn’t involved in World Liberty’s day-to-day operations, potential conflicts exist so long as he maintains a financial stake in the company, said Richard Painter, ethics counsel to former president George W. Bush and a University of Minnesota professor.

“Whether you’re involved in the management of the company or not, that’s not relevant at all. What’s relevant is if you own a financial interest that could be directly impacted by your government work,” said Painter.

Trump also faces potential conflicts from World Liberty, the experts said.

Trump is listed as “chief crypto advocate" on World Liberty’s website and is entitled to a cut of its revenues, according to the company’s terms and conditions.

World Liberty sells a proprietary token that cannot be traded, those terms and conditions say, unlike Bitcoin and other crypto tokens. Trump and other unnamed “affiliates” are entitled to 75% of some World Liberty revenues, according to the terms, raising the possibility of people buying World Liberty coins to try to gain favor with him.

"Is this an alternative way of ingratiating yourself with Trump?" Clark said of World Liberty.

Trump’s business dealings drew close scrutiny in his first term. While he was in office, at least 20 governments, including Saudi Arabia and China, collectively spent more than $7.8 million at his hotels and other properties, according to a report published by congressional Democrats in January. Trump did not face legal consequences for that spending.

The Trump transition team did not respond to a request for information on what steps he would take to address any conflicts from World Liberty.

World Liberty’s connection with Trump features heavily on the company’s website. A picture of Trump, ear bandaged after the July assassination attempt on him, greets visitors on the home page. The first people listed as members of the World Liberty team are Trump and his three sons, Don Jr., Eric and Barron, who are described as "Web3 ambassadors." Trump himself, along with relatives and associates, unveiled the business during a live event on X in September. Don Jr. and Barron did not respond to requests for comment.

Through World Liberty, Trump and his family could also benefit from possible regulatory changes that his administration makes involving crypto, the experts said. During the campaign, Trump vowed to name a new SEC chair to replace Gary Gensler, who took on the crypto industry with various lawsuits. Last week, he tapped crypto-friendly Washington lawyer Paul Atkins for the role.

Witkoff’s sons, Alex and Zach, are also listed as co-founders of World Liberty. They did not respond to requests for comment. Eric Trump told Reuters he is “very involved” in World Liberty.

If foreign governments or sovereign wealth funds were to invest in World Liberty, that could place Witkoff and Trump in violation of the U.S. Constitution s "emoluments" clause, designed to thwart corruption and improper influence on government, said Larry Noble, a professor at American University and former general counsel of the Federal Election Commission . The clause bars federal officials from accepting gifts or other advantages from foreign governments without congressional approval.

Diplomats said they were surprised when Witkoff, a New York real-estate investor, was named special Middle East envoy on Nov. 12 given his lack of foreign policy experience. He will assume the job at a time of heightened regional tensions, including the Gaza conflict, turmoil in Syria and the risk of a direct confrontation between Israel and Iran.

Witkoff donated $250,000 to the pro-Trump super PAC spending group MAGA Inc in December 2023. He is worth at least $1 billion, according to Forbes.

Already, the lines between Witkoff’s business venture and his diplomatic role are blurring. Witkoff spoke on Monday at the Abu Dhabi crypto conference. The program listed him as Trump s special envoy to the region and also mentioned the crypto business in his biography. "A forward-thinking entrepreneur, Steve is now focused on the intersection of real estate, Bitcoin, and crypto," the conference website read. Those attending paid as much as $9,999 to access special sessions, which were closed to the media. Tron’s Sun was also listed as a speaker.

Witkoff did not respond to questions about the conference.

SPECIAL ENVOY, FEW RULES

Witkoff’s new role of special envoy is not defined by law and may not require confirmation by the U.S. Senate. The incoming administration could define him as a "special government employee," a designation meant for temporary roles, said Scott Greytak, director of advocacy at Transparency International’s Washington office.

In that case, “unlike regular government employees, he can continue receiving outside income without limits,” he said. “However, he must file a financial disclosure form and cannot take any official actions that would financially benefit himself.”

Witkoff should also sign an agreement with the State Department that he will not talk with foreign government officials about crypto while on official business, said Meredith McGehee, an independent ethicist and former policy director of nonprofit watchdog the Campaign Legal Center. "That should be a wall. You can t say:  By the way, what s your government going to do on crypto? " McGehee said.

Special envoys under Biden, former President Barack Obama and Trump’s own first administration were typically not from the business sector, Reuters found in a review of the emissaries. None had founded a major company linked to a presidential candidate weeks before the election.

Some had extensive investments in the private sector, however. Multimillionaire John Kerry divested assets identified by government ethics officers as potentially conflicting with his role as Biden’s special climate envoy, according to a 2021 certificate of divestiture from the U.S. Office of Government Ethics.

Trump has appointed a close business associate before. In 2016, he tapped the Trump Organization’s chief legal officer, Jason Greenblatt, as Special Representative for International Negotiations, a key role in Israeli-Palestinian talks. Greenblatt told Reuters he left Trump’s company before taking up his White House role. He did not recall whether he sold his investments before working as a special envoy, but said he would have followed applicable rules.