Circle Shareholders and Sun Yuchen File Lawsuits Amid Ongoing Controversy Over Trump's Family Crypto Business WLFI

On October 22, J. Benjamin Greenberg, a shareholder of Circle, the issuer of the US dollar stablecoin USDC, filed a lawsuit against U.S. President Donald Trump.

The defendants also include Trump's family crypto company World Liberty Financial (WLFI). The plaintiff claims that two transactions involving entities related to the United Arab Emirates violate the foreign emoluments clause in the Constitution and harm Circle's business interests.

The two transactions involved amounts of $500 million and $2 billion, both linked to institutions associated with UAE National Security Advisor Tahnoon bin Zayed Al Nahyan. Meanwhile, WLFI's stablecoin USD1 has just received preliminary approval for a national trust bank license. One path leads to the courts, while the other leads to regulatory agencies, with USD1 simultaneously under scrutiny from both.

The Two Transactions

The lawsuit was filed by Greenberg in federal court on behalf of Circle. In addition to Trump and WLFI, the defendants include WLFI's parent company and U.S. Middle East envoy Steve Witkoff. The plaintiff's demands include recovering related profits, disclosing other foreign cryptocurrency payments received by Trump, and seeking damages.

The two transactions targeted in the lawsuit involve different types of money.

The first is an equity transaction. Just days before Trump took office in January 2025, the Abu Dhabi entity Aryam Investment 1 signed a contract to purchase 49% of WLFI for $500 million. This entity is backed by UAE National Security Advisor Tahnoon bin Zayed Al Nahyan. According to the Wall Street Journal, the initial payment was $250 million, of which approximately $187 million flowed to Trump family entities, and at least $31 million went to entities associated with Witkoff. The agreement was signed by Eric Trump. Reports indicate that WLFI had not yet launched any products at that time.

The second is a stablecoin settlement. The Abu Dhabi fund MGX, chaired by Tahnoon, announced in March that it would invest $2 billion in Binance. On May 1, Eric Trump publicly stated that this investment would be settled in USD1. The lawsuit lists this $2 billion investment settled in USD1 as one of the relevant transactions. Binance CEO Richard Teng previously stated that settling in USD1 was MGX's decision and that Binance did not provide any preferential treatment.

However, obtaining an institutional order for USD1 does not alone prove that Circle would have originally secured this business, nor does it imply that Circle lost a $2 billion business. The issue of commercial damage and its causation remains a challenge the lawsuit must confront.

Disassociating

Reports indicate that Greenberg is a former software engineer at Circle, holding about 10,000 shares, and is suing in the company's name. The competitive argument in the lawsuit is that WLFI used these foreign funds to grow USD1, taking business that should belong to Circle.

In response, Circle has made it clear that this lawsuit was initiated by a shareholder personally, and the company did not initiate, direct, authorize, or participate in it.

WLFI's response was direct. A spokesperson stated that the lawsuit is "baseless," asserting that the company complies with all U.S. laws and that no one at WLFI holds a position in the U.S. government. Their lawyer described it as a "partisan press release" that is "unfounded." The company has also stated that Trump was not involved in this equity transaction and currently holds no position in the project.

Qualification is the First Hurdle

Such lawsuits are not new.

Since 2017, lawsuits regarding foreign emoluments related to Trump's hotel business have emerged, with plaintiffs including Washington's ethics watchdog, the attorneys general of Maryland and Washington, D.C., and nearly 200 Democratic lawmakers. Most cases have stumbled at the same threshold: what specific harm did the plaintiffs suffer, and do they have standing to sue? Some courts have found standing, while appellate courts have overturned those decisions.

This time, the plaintiff is a small shareholder from a competitor, and the approach has changed: instead of claiming public interest, they are claiming business losses. Circle, on whose behalf he is asserting rights, has publicly distanced itself, and whether the judge is willing to accept this route is the first hurdle of the entire lawsuit.

The Second Plaintiff

Circle's shareholder is not the only one suing WLFI.

In April 2026, Justin Sun, founder of TRON, filed a lawsuit against WLFI in federal court in California. According to Reuters, his lawsuit indicates that he invested $45 million in WLFI. He claims that his tokens were frozen due to WLFI blacklisting his wallet containing over 500 million tokens in September 2025. He also alleges that WLFI pressured him to issue and promote USD1 on TRON, and after he refused, he faced retaliation.

WLFI denies these allegations. Witkoff publicly responded, stating that this is Sun's way of diverting attention from his own misconduct.

Recently, in a conversation with Jin Ming, he characterized this lawsuit as "business to business," asserting that he continues to support Trump's crypto policies and AI strategy, maintaining a strong position in U.S. stocks, and that the lawsuit is merely a way for investors to protect their rights. He also mentioned that even if the agreement's value involves $400 to $500 million, it does not significantly impact his overall assets.

The allegations in the two lawsuits differ. Sun's focuses on governance and token freezing, while Circle's shareholder targets the source of funds. However, both lawsuits encounter the question of how USD1 reaches large funds and platforms: one claims someone was pressured to promote USD1 on TRON, while the other points to the $2 billion settlement via Binance.

Beyond the License

On August 14, the Office of the Comptroller of the Currency (OCC) granted preliminary conditional approval for World Liberty Trust Company's national trust bank license application. The company still needs to meet relevant conditions and complete pre-opening regulatory requirements to obtain final approval. Such trust banks generally cannot accept deposits or issue loans like commercial banks. Once approved, it will take over the issuance and reserve custody of USD1 from BitGo. Circle has also previously received preliminary conditional approval for a similar license application.

During the review period, the OCC received opinions regarding conflicts of interest involving UAE investors, the Trump family, and the foreign emoluments clause. The approval letter determined that these foreign investors are not the primary shareholders of the bank and received passive holding commitments from several investors, promising not to seek control or influence over the bank's operations and decisions, with Eric Trump signing on behalf of an investment entity. The OCC viewed the questions regarding conflicts of interest and the foreign emoluments clause as outside the scope of the license review and noted that WLFI itself is not the subject of this application.

This license review did not make a judgment on whether the foreign emoluments clause was violated.

One of Circle's past competitive advantages has been its compliance qualifications, including obtaining regulatory approval earlier. With WLFI receiving preliminary approval, this gap has narrowed at the licensing level. The Circle shareholder's lawsuit lists this approval as one of the government decisions that may benefit the Trump family and extends the controversy to the relationship between foreign funds and the Trump family's business interests.

In February, two Democratic senators on the Senate Banking Committee wrote to the Treasury Secretary, asking him to determine whether the $500 million investment by UAE-related investors to acquire approximately 49% of WLFI's equity required review by the Committee on Foreign Investment in the United States (CFIUS) for national security and to conduct a review if applicable. Additionally, Democratic representatives in the House have pushed for an investigation into this equity transaction.

The court must first determine whether the plaintiff has standing, and the OCC has already excluded the foreign emoluments clause from the license review scope. The investigations and review requests raised by Democratic lawmakers in Congress have not yet yielded conclusions.

Currently, the issues arising from equity investments and stablecoin settlements remain unanswered: capital associated with the UAE has purchased equity in a Trump family-related enterprise, while another $2 billion investment directed at Binance has been settled in USD1. When foreign funds intersect with the commercial interests of a presidential family and U.S. financial infrastructure, who will examine the potential impacts of these relationships under existing laws and regulatory mechanisms?

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