Eric Trump has agreed to step back from decision-making at the proposed national trust bank World Liberty Financial while the cryptocurrency business undergoes federal approval procedures.
Eric, World Liberty co-founder Zack Folkman, and Emirati investor Hamad Halfan Ali Matar Al Shamsi have signed separate agreements through related companies. These agreements prevent all three investors from making management decisions for the bank.
These commitments became public after World Liberty received preliminary approval late last week. They concern the company's ties to the Trump family and foreign funds, as its subsidiary seeks a federal bank charter.
Such deals are referred to as 'passivity commitments.' According to World Liberty, the reason for entering into such agreements is to guarantee that specific investors will not control the trust bank.
Attorneys stated that the reason this case will be handled differently is that, in addition to the foreign investor having ties to the Abu Dhabi royal family, this is the son of a former president, distinguishing this situation from others. This also holds true for other aspects of the financial business.
World Liberty Authorities Exclude Major Investors from Bank Management While Regulators Review Its Operations
World Liberty spokesperson David Waxman stated that the company expects to remain under federal supervision for many years.
"World Liberty is purposefully pursuing regulation and ongoing supervision, not its elimination. Until full approval is granted and for many years thereafter, World Liberty Trust Company will fully cooperate with the OCC, the federal regulator, and will comply with all other applicable laws and regulations," said Waxman.
Due to World Liberty's connections to its owners, the proposed crypto bank is facing closer scrutiny compared to other similar projects. Shortly before Donald Trump became president, World Liberty struck a deal to sell a 49% stake to a company linked to Sheikh Tahnoon bin Zayed, the brother of the President of the UAE.
Trump and his family also have financial interests in World Liberty. The company states that none of them work there as executives, directors, or employees. The White House rejects claims that Trump's business interests represent a conflict of interest or that he uses presidential power for personal enrichment.
Federal reviews of bank charters include detailed vetting of the finances of organizers and directors. World Liberty's documents list Zack Witkoff, the son of presidential envoy Steve Witkoff. Also mentioned are Scott Alper, head of the Witkoff Group, and Robert Witkoff, Steve's brother.
Federal Charter Would Move Issuance of USD1 Tokens and Nearly $4 Billion in Reserves to World Liberty
The charter would allow World Liberty to directly own the assets backing $USD1, its dollar-backed stablecoin.
This structure would allow the company to keep issuance and reserve management within one entity, rather than relying on external intermediaries. According to CoinGecko, the market capitalization of $USD1 is nearly $4 billion, making it one of the world's largest stablecoins.
The filing also coincides with a broader shift in federal policy regarding crypto banking. Jonathan Gould, the U.S. Comptroller of the Currency, stated after taking office that approving new bank charters would be one of his priorities.
This differed from the policy of the Biden administration, which was much less receptive to license applications from companies dealing with digital assets.
World Liberty falls into this group. Ripple, Paxos, and Fidelity Digital Assets received conditional approval to form trust banks in 2025. Coinbase (NASDAQ: COIN) received similar conditional approval earlier this year. These decisions pave the way for companies to operate regulated trust banks, but each still must meet federal requirements before receiving full authorization.
The Trump administration has also delved deeper into digital asset policy. On Wednesday, Trump met with top crypto company executives at the White House. The meeting occurred as the Securities and Exchange Commission is finalizing a broader regulatory framework for the industry.
Now, World Liberty must navigate the remaining steps of this process. Regulators still need to decide whether the company can transfer the reserve system for $USD1 into a federally supervised banking operation.
