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How Binance Ended Up Holding 87% of the Trump-Linked USD1 Stablecoin
Binance now controls an extraordinary share of USD1, a U.S. dollar–pegged stablecoin tied to a Trump-affiliated crypto venture. According to a Forbes analysis using on-chain data from Arkham, wallets linked to Binance hold roughly $4.7 billion of USD1 out of a $5.4 billion total supply — about 87% of all tokens in circulation.
That level of concentration is unmatched among the ten largest stablecoins by market capitalization.
USD1 is issued by World Liberty Financial, a project launched in 2024 that describes itself as “inspired by the vision of Donald Trump.” A Trump-affiliated LLC owns roughly 38% of the company, making the stablecoin’s distribution especially sensitive from both market-structure and political perspectives.
Because Binance is barred from serving U.S. customers under its 2023 settlement with the U.S. Treasury, Forbes notes that the vast majority of USD1 held on Binance likely belongs to non-U.S. accounts, assuming the exchange is operating within compliance rules.
Why So Much USD1 Sits on Binance
The concentration didn’t happen overnight. Blockchain data shows Binance’s USD1 balances rising steadily through late 2025, driven by a mix of promotions, strategic deals, and internal balance-sheet decisions that effectively anchored the stablecoin to the exchange.
One major catalyst was a promotional campaign announced in late January. Binance revealed that USD1 holders on its platform would receive $40 million worth of WLFI, World Liberty Financial’s governance token. Within days, World Liberty transferred roughly $40 million in WLFI directly to Binance wallets, according to Arkham data. The incentive was unusually generous by stablecoin standards and strongly encouraged users to keep USD1 parked on Binance rather than move it elsewhere.
An even larger driver was a deal involving MGX. In May 2025, MGX used $2 billion worth of USD1 to invest in Binance. That transaction alone placed a massive share of USD1’s backing assets under Binance’s custody.
From the issuer’s perspective, this structure is lucrative. Stablecoin issuers typically invest backing dollars in instruments like U.S. Treasuries and keep the yield — currently around 3.6% annually. Concentrating reserves inside Binance-linked wallets increases both visibility and interest income tied to USD1’s supply.
In December, Binance added another layer by converting assets backing its discontinued BUSD into USD1. World Liberty Financial said the move “embedded USD1 more deeply into Binance’s ecosystem,” effectively making it part of the exchange’s updated collateral framework.
Why Concentration Raises Red Flags
Independent researcher Molly White told Forbes that while the concentration isn’t shocking given Binance’s incentives, it is still unusual. The concern isn’t about day-to-day trading, but about tail risks.
If assets are heavily concentrated at a single exchange, they can become trapped during bankruptcy proceedings, technical outages, or legal disputes. The situation is more sensitive if part of the 87% represents assets Binance owns outright rather than holds on behalf of customers, giving the exchange leverage over the issuer.
Former SEC adviser Corey Frayer was more blunt, suggesting the structure implies USD1 “was never meant to be a real stablecoin,” but rather a mechanism to move capital toward Trump-linked entities.
For context, Binance’s U.S. affiliate, Binance US, holds just $1,119 worth of USD1, underscoring how offshore-focused the distribution really is.
Trump’s Financial Ties to World Liberty Financial
World Liberty Financial launched in September 2024 with Trump listed as “co-founder emeritus” alongside Donald Trump Jr., Eric Trump, and Barron Trump.
A Trump-affiliated LLC owns about 38% of the company and controls 22.5 billion WLFI tokens, according to Reuters. The same entity receives 75% of proceeds from WLFI token sales, per disclosures on the project’s website.
Trump reported $57.4 million in income from World Liberty Financial in his most recent financial disclosure, channeled through the Donald J. Trump Revocable Trust. Forbes estimates the WLFI token added roughly $1 billion to his net worth by October 2025.
USD1 vs. WLFI: Two Very Different Tokens
USD1 is designed as a conventional stablecoin, redeemable 1-to-1 with U.S. dollars and backed by cash and government money-market instruments — similar in structure to Tether’s USDT or Circle’s USDC.
WLFI, by contrast, is a governance token sold to accredited and foreign investors. It does not represent equity, carries no asset backing, and only grants voting rights over project decisions. Tokens were initially non-transferable and only partially unlocked after a community vote in mid-2025.
Binance’s current promotion distributes WLFI to users who hold USD1 on the platform through February 20, funded by a transfer of 235 million WLFI tokens from World Liberty Financial.
Why Scrutiny Is Intensifying
The situation has drawn added attention due to timing. Binance founder Changpeng Zhao was sentenced in 2024 for anti-money-laundering violations and later received a presidential pardon from Trump in October 2025. Soon after, Binance expanded USD1 promotions and related incentives.
In May 2025, shortly after Binance listed USD1, the Securities and Exchange Commission dropped its lawsuit against Binance. While both Binance and World Liberty Financial deny any improper coordination, the sequence has fueled speculation.
Adding to the complexity, the Wall Street Journal reported that Eric Trump signed a deal to sell 49% of World Liberty Financial to associates of Sheikh Tahnoon bin Zayed Al Nahyan for $500 million. Tahnoon chairs MGX — the same fund that invested $2 billion in Binance using USD1.
That deal has triggered a congressional inquiry led by Ro Khanna, who is investigating whether the transaction influenced U.S. policy decisions.
Bottom Line
Binance’s control of 87% of USD1’s supply is unprecedented among major stablecoins. The dominance stems from aggressive incentives, a $2 billion MGX transaction, and Binance’s decision to fold USD1 into its post-BUSD infrastructure.
While both companies frame the relationship as ordinary business, the level of concentration creates real structural risk — and, combined with the political and regulatory backdrop, ensures that USD1 will remain under intense scrutiny.
#Binance #wendy $BTC $ETH $BNB
That level of concentration is unmatched among the ten largest stablecoins by market capitalization.
USD1 is issued by World Liberty Financial, a project launched in 2024 that describes itself as “inspired by the vision of Donald Trump.” A Trump-affiliated LLC owns roughly 38% of the company, making the stablecoin’s distribution especially sensitive from both market-structure and political perspectives.
Because Binance is barred from serving U.S. customers under its 2023 settlement with the U.S. Treasury, Forbes notes that the vast majority of USD1 held on Binance likely belongs to non-U.S. accounts, assuming the exchange is operating within compliance rules.
Why So Much USD1 Sits on Binance
The concentration didn’t happen overnight. Blockchain data shows Binance’s USD1 balances rising steadily through late 2025, driven by a mix of promotions, strategic deals, and internal balance-sheet decisions that effectively anchored the stablecoin to the exchange.
One major catalyst was a promotional campaign announced in late January. Binance revealed that USD1 holders on its platform would receive $40 million worth of WLFI, World Liberty Financial’s governance token. Within days, World Liberty transferred roughly $40 million in WLFI directly to Binance wallets, according to Arkham data. The incentive was unusually generous by stablecoin standards and strongly encouraged users to keep USD1 parked on Binance rather than move it elsewhere.
An even larger driver was a deal involving MGX. In May 2025, MGX used $2 billion worth of USD1 to invest in Binance. That transaction alone placed a massive share of USD1’s backing assets under Binance’s custody.
From the issuer’s perspective, this structure is lucrative. Stablecoin issuers typically invest backing dollars in instruments like U.S. Treasuries and keep the yield — currently around 3.6% annually. Concentrating reserves inside Binance-linked wallets increases both visibility and interest income tied to USD1’s supply.
In December, Binance added another layer by converting assets backing its discontinued BUSD into USD1. World Liberty Financial said the move “embedded USD1 more deeply into Binance’s ecosystem,” effectively making it part of the exchange’s updated collateral framework.
Why Concentration Raises Red Flags
Independent researcher Molly White told Forbes that while the concentration isn’t shocking given Binance’s incentives, it is still unusual. The concern isn’t about day-to-day trading, but about tail risks.
If assets are heavily concentrated at a single exchange, they can become trapped during bankruptcy proceedings, technical outages, or legal disputes. The situation is more sensitive if part of the 87% represents assets Binance owns outright rather than holds on behalf of customers, giving the exchange leverage over the issuer.
Former SEC adviser Corey Frayer was more blunt, suggesting the structure implies USD1 “was never meant to be a real stablecoin,” but rather a mechanism to move capital toward Trump-linked entities.
For context, Binance’s U.S. affiliate, Binance US, holds just $1,119 worth of USD1, underscoring how offshore-focused the distribution really is.
Trump’s Financial Ties to World Liberty Financial
World Liberty Financial launched in September 2024 with Trump listed as “co-founder emeritus” alongside Donald Trump Jr., Eric Trump, and Barron Trump.
A Trump-affiliated LLC owns about 38% of the company and controls 22.5 billion WLFI tokens, according to Reuters. The same entity receives 75% of proceeds from WLFI token sales, per disclosures on the project’s website.
Trump reported $57.4 million in income from World Liberty Financial in his most recent financial disclosure, channeled through the Donald J. Trump Revocable Trust. Forbes estimates the WLFI token added roughly $1 billion to his net worth by October 2025.
USD1 vs. WLFI: Two Very Different Tokens
USD1 is designed as a conventional stablecoin, redeemable 1-to-1 with U.S. dollars and backed by cash and government money-market instruments — similar in structure to Tether’s USDT or Circle’s USDC.
WLFI, by contrast, is a governance token sold to accredited and foreign investors. It does not represent equity, carries no asset backing, and only grants voting rights over project decisions. Tokens were initially non-transferable and only partially unlocked after a community vote in mid-2025.
Binance’s current promotion distributes WLFI to users who hold USD1 on the platform through February 20, funded by a transfer of 235 million WLFI tokens from World Liberty Financial.
Why Scrutiny Is Intensifying
The situation has drawn added attention due to timing. Binance founder Changpeng Zhao was sentenced in 2024 for anti-money-laundering violations and later received a presidential pardon from Trump in October 2025. Soon after, Binance expanded USD1 promotions and related incentives.
In May 2025, shortly after Binance listed USD1, the Securities and Exchange Commission dropped its lawsuit against Binance. While both Binance and World Liberty Financial deny any improper coordination, the sequence has fueled speculation.
Adding to the complexity, the Wall Street Journal reported that Eric Trump signed a deal to sell 49% of World Liberty Financial to associates of Sheikh Tahnoon bin Zayed Al Nahyan for $500 million. Tahnoon chairs MGX — the same fund that invested $2 billion in Binance using USD1.
That deal has triggered a congressional inquiry led by Ro Khanna, who is investigating whether the transaction influenced U.S. policy decisions.
Bottom Line
Binance’s control of 87% of USD1’s supply is unprecedented among major stablecoins. The dominance stems from aggressive incentives, a $2 billion MGX transaction, and Binance’s decision to fold USD1 into its post-BUSD infrastructure.
While both companies frame the relationship as ordinary business, the level of concentration creates real structural risk — and, combined with the political and regulatory backdrop, ensures that USD1 will remain under intense scrutiny.
#Binance #wendy $BTC $ETH $BNB
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