Launchy Regulatory Roundup #74 - Trump Linked WLFI Gets Heat Over $500M UAE Money

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Welcome to our 74th edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!

In Today's Edition:

• Headline: Trump Linked WLFI Gets Heat Over $500M UAE Money 🇺🇸 

• Global Legal Roundup

• Case Study: White House Tries to Broker Peace on Stablecoin Rewards 🔎 

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HEADLINE

Trump Linked WLFI Gets Heat Over $500M UAE Money

State of play: A senior House Democrat, Rep. Ro Khanna, opened a probe into WLFI after reports that a UAE linked entity invested $500M for a 49% stake. Khanna sent a letter to WLFI co founder Zach Witkoff demanding documents and answers.

• The letter leans on a Wall Street Journal report that the investor was Aryam Investment 1, tied to Sheikh Tahnoon bin Zayed Al Nahyan.

• The deal was reportedly signed four days before Trump’s inauguration, with $250M paid upfront.

• The reporting says $187M went to Trump family entities and at least $31M went to entities affiliated with Steve Witkoff’s family.

Khanna frames the deal as a national security issue because of alleged UAE links to Chinese interests, and he points to timing around US approvals for advanced chip exports and UAE AI projects.

• The letter also highlights the $2B MGX investment into Binance that allegedly involved WLFI’s $USD1, plus the timing of Sheikh Tahnoon’s Washington visit and a later presidential pardon for Changpeng Zhao.

• Khanna asked WLFI to respond to 16 questions by March 1, 2026, and requests items like the Aryam agreements, communications around the Binance deal, cap tables, due diligence materials, and conflict of interest policies.

• Separately, President Trump said he was unaware of the UAE investment, claiming his sons handle the project and he is not involved in day to day operations.

What’s Next: Khanna’s March 1, 2026 deadline forces WLFI to either open the books or stonewall. If they dodge, expect subpoenas, more committee heat, and this story getting stapled to every crypto bill hearing.

Why it Matters: This is the nightmare combo for Washington. Foreign money, a president linked project, a stablecoin rail allegedly touching a Binance deal, and China adjacency.

Our Take: If you are watching narratives, this shifts from “innovation and clarity” to “capture risk and foreign influence,” and that usually means slower timelines and tougher terms.

GLOBAL LEGAL ROUNDUP

America:

• 🇺🇲 Nevada file lawsuit against Coinbase over unlicensed wagering.

• 🇺🇲 CFTC scraps Biden-era proposal to ban political event contracts.

• 🇺🇲 NYAG slams stablecoin law GENIUS citing consumer protection concerns.

• 🇺🇲 Incognito Market founder sentenced to 30 years for crypto drug market.

• 🇺🇲 Cynthia Lummis urges US banks to embrace stablecoins and digital assets.

• 🇨🇦 Canada's investment watchdog sets new rules for crypto custody.

Middle East & Africa:

• 🇮🇷 Crypto exchanges sanctioned alongside Iranian officials.

APAC:

• 🇻🇳 Vietnam to tax crypto like stocks with 0.1% trading levy.

• 🇭🇰 Hong Kong to grant first stablecoin issuer licenses in March.

• 🇨🇳 China tightens stance on RWA tokenization and offshore yuan stablecoins.

• 🇰🇷 S.Korean crypto CEO gets 3-year prison term in market manipulation case.

CASE STUDY

White House Tries to Broker Peace on Stablecoin Rewards

State of play: Crypto firms, trade groups, and major banking lobby groups met at the White House to try to untangle one of the biggest blockers for US crypto market structure legislation: whether stablecoin rewards are allowed, and whether third parties like Coinbase can offer them.

• The meeting was led by Patrick Witt from the President’s Council of Advisors for Digital Assets.

• Crypto advocates framed it as real progress, but insiders said banks came in rigid with limited room to compromise.

• The fight centers on the GENIUS stablecoin law. It bans issuers from paying direct interest to holders, but does not clearly ban third party platforms from offering rewards.

• Banks argue rewards could pull deposits away and hurt community banks. Crypto firms argue this was already debated and banks are trying to kneecap competition.

• No final deal came out of the meeting, but both sides reportedly mapped pain points and possible compromise zones, with the White House planning smaller follow up sessions aimed at actual decisions.

Our Take: This is basically TradFi protecting deposits vs crypto trying to productize yield. Banks look dug in, so the “compromise” probably becomes procedural: rewards allowed, but only via ring fenced programs with stricter disclosures, caps, or routing.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our comprehensive database of crypto regulations around the world👇

NOTEWORTHY READS & MEME

• Daniel Barabander’s read on The 7 Powers in Crypto.

• Daniel Barabander’s read on Insider Trading and Prediction Markets.

• Coindesk’s read on the US  regulator declares do-over on prediction markets.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.