Presidential Conflicts of Interest: How Preventive Safeguards Failed in Trump’s Second Term
Oversight systems intended to prevent presidential conflicts of interest now act only after transactions close, rather than beforehand. In President Donald Trump’s second term, this shift created a recurring pattern: regulatory pressure decreased, private actors gained access or advantage, and oversight arrived too late or not at all. This essay examines that pattern in crypto regulation, federal bank licensing, and enforcement of the Foreign Emoluments Clause.
In May 2025, President Donald Trump responded “I don’t know” when asked on Meet the Press whether he was constitutionally required to uphold the Constitution. He said he would defer to legal advisers. The remark came months into Trump’s second term, following four years as president, and drew criticism from constitutional scholars, including Michael Gerhardt.
But it revealed something important: Trump described constitutional duties not as firm rules that bind him from the start, but as obligations interpreted later.
The claim here is simpler: across regulation, finance, licensing, and constitutional limits, safeguards meant to stop conflicts of interest now act only after the money has already changed hands.
The ethics framework adopted at the start of Trump’s second term imposed fewer preventive limits than his first-term plan, specifically removing the prohibition on new deals with private foreign companies while leaving reactive oversight unchanged.
The focus is not on criminal corruption. It is structural self-dealing—situations where public power is exercised in ways that predictably generate personal profit. The cases examined below span November 2024 through January 2026. In each, a government action preceded or enabled financial benefit to the president, his family, or closely linked businesses.
Each example included here shares four features: a specific government or regulatory action; close timing between that action and a financial gain for the president, a family member, or their business; a benefit that appears as income, increased company value, or privileged market access; and the absence, delay, or weakening of rules meant to prevent such conflicts. Cases without clear links between action and profit are excluded, as are patterns relying on speculation.
When safeguards respond only after the fact, conflicts that would normally be blocked become legal and routine. The problem is structural self-dealing: government actions happen when the president or his family can profit, and ethics rules do not stop them.
Case 1: World Liberty Financial and the Scale of Structural Self-Dealing
World Liberty Financial shows what happens when weak oversight allows large amounts of money to be raised before anyone steps in: relaxed enforcement combined with family-controlled businesses to produce major profits without breaking the law.
After Donald Trump’s election in November 2024, federal oversight of cryptocurrency became more permissive. During 2025, the Securities and Exchange Commission narrowed its enforcement posture and closed or scaled back several pending crypto investigations. At the same time, there was no publicly disclosed recusal, ethics review, or screening process addressing the president’s or his family’s growing financial involvement in the crypto industry.
In that environment, the Trump family launched World Liberty Financial, a cryptocurrency and decentralized-finance venture built around the USD1 stablecoin and WLFI governance tokens. Investigative reporting and corporate filings show that entities controlled by the Trump family received most of the proceeds from WLFI token sales.
By mid-2025, World Liberty Financial and related Trump-linked crypto ventures had raised more than $550 million through token sales. Total crypto-related income to Trump family entities exceeded $800 million, with estimates reported by Reuters approaching $1 billion when cash proceeds and retained tokens are included. According to Reuters, cryptocurrency replaced traditional real estate as the main source of Trump family wealth growth after the election.
Most of this fundraising occurred after Trump returned to office and during the period of relaxed enforcement. Foreign state investors participated in World Liberty Financial token sales, including Abu Dhabi’s state-controlled MGX investment company, yet there was no advance review before foreign money flowed into a business controlled by the president’s family.
When preventive safeguards are weakened, family-controlled companies can legally pull large sums from lightly regulated markets before oversight begins. Reactive enforcement turns conflicts from isolated risks into ongoing profit systems by changing when the law acts.
This structural pattern is not confined to cryptocurrency. In late 2025, Vulcan Elements, a startup backed by 1789 Capital, received a $620 million loan from the Pentagon’s Office of Strategic Capital, the largest loan the office had ever issued. The loan came months after 1789 invested in the company. Donald Trump Jr. is a partner at the firm. Pentagon officials stated that he was not involved in the decision. As with World Liberty Financial, the issue is not personal involvement or illegality, but the absence of safeguards operating in advance.
Case 2: Crypto.com, SEC Enforcement, and Trump Media
In 2023 and 2024, the cryptocurrency exchange Crypto.com was under investigation by the Securities and Exchange Commission. According to Associated Press reporting, SEC staff had approved bringing charges and informed the company that enforcement action was likely.
After Donald Trump won the election in November 2024, Crypto.com sharply increased its political activity tied to Trump-aligned entities. In December 2024, the company donated $1 million to Trump’s inaugural committee. In February 2025, it donated another $10 million to a super PAC supporting Trump. During the same period, Crypto.com expanded its lobbying presence in Washington, including hiring a prominent Trump fundraiser to lobby the White House and the SEC.
On March 27, 2025, the SEC formally closed its investigation into Crypto.com without filing charges, and there was no inspector general review, congressional inquiry, or recusal process addressing the timing.
Within months, Crypto.com entered a major business partnership with Trump Media & Technology Group, the company that owns Truth Social. In August 2025, the two companies announced a joint venture centered on managing Crypto.com’s Cronos (CRO) cryptocurrency. According to SEC filings and company statements, Crypto.com committed roughly $1 billion worth of CRO tokens to the venture, while Trump Media contributed licensing rights to its brand and media platform rather than cash. Donald Trump, through a revocable trust he controls, indirectly owns approximately 53 percent of Trump Media’s shares, making him the primary beneficiary of any increase in the company’s value or income tied to the deal.
The sequence matters. Crypto.com faced serious enforcement risk before the election. Political donations and lobbying escalated after Trump’s victory. The investigation closed in March 2025. The business partnership with Trump’s company followed months later. Enforcement discretion resolved regulatory risk first; financial benefit followed.
Case 3: Licensing Authority and Conflicts Before They Begin
This case shows how gaps in preventive safeguards allow conflicts to be built into future regulatory dealings from the start.
In January 2026, World Liberty Financial announced plans to apply for a national bank charter.
National bank charters are issued by the Office of the Comptroller of the Currency, an executive-branch agency whose leadership is appointed by—and removable by—the president. Approval is discretionary and carries major benefits. A charter would allow the company to operate as a federally regulated bank, process payments directly through federal systems, and establish credibility with investors and business partners.
No law prevents a business controlled by the president’s family from applying for a national bank charter while the president is in office. Ethics rules do not require the president to sell business interests, place them in independent trusts, or seek approval before family companies apply for federal licenses. There is no requirement that the president step back from decisions affecting the OCC when family finances are at stake.
Even without approval, the application process itself can affect company value by signaling credibility to investors and partners. Trump family members remain the primary owners of World Liberty Financial through ownership stakes, token holdings, and revenue rights. Any increase in the company’s value tied to the charter process would therefore produce financial gain for the family.
Here, conflict is not something to be discovered after a decision is made. It is built into the process from the start, when family businesses can seek federal approval from agencies the president controls, without any safeguards to prevent it.
Case 4: When Constitutional Constraints Operate Too Late
The Foreign Emoluments Clause bars federal officials from accepting payments or benefits from foreign governments without congressional consent. Yet constitutional constraints operated only after the fact: profit from foreign governments became routine while those governments maintained active diplomatic relationships with the United States.
During Trump’s second term, the White House controlled U.S. foreign policy toward Saudi Arabia, the United Arab Emirates, and Qatar. At the same time, Trump-branded real estate and licensing projects in those countries moved forward with help from companies tied to those governments, including firms backed by state investment funds and government-run developers. Those same governments controlled the zoning approvals, building permits, and infrastructure support that these real estate projects needed to proceed.
The projects generate ongoing licensing and management fees paid to Trump Organization companies. Trump retains ownership interests in the Trump Organization, making this income a direct personal benefit. Project approvals, permits, and construction milestones happened while Trump was still in office, not after he left the presidency.
There was no publicly disclosed congressional approval before these deals moved forward. In practice, the Foreign Emoluments Clause worked through lawsuits, congressional letters, and political disputes—only after the money started flowing.
Here, even constitutional limits functioned only after the practice became routine. When enforced after the fact, profit from foreign governments requires only that enforcement come too late.
Conclusion
When corruption and coincidence become structurally indistinguishable, the system has failed, regardless of which one actually occurred.
World Liberty Financial alone raised more than $800 million during the first year of Trump’s second term, with most proceeds flowing to Trump family-controlled entities. Additional benefits include completed commercial partnerships, a prospective federal licensing authority, and ongoing foreign commercial engagements generating licensing fees during his tenure.
What this essay establishes is structurally prior: the system allowed conditions where corruption and coincidence became indistinguishable. When an SEC investigation closes after substantial donations and a business partnership follows months later, we cannot prove influence—but neither can we rule it out. When family ventures raise hundreds of millions in markets where enforcement is relaxed, we cannot prove the relaxation served family interests—but the structural conflict is undeniable. When family businesses seek federal licenses from agencies the president controls, conflict is built into the transaction regardless of the outcome.
This indistinguishability is itself a governance failure. Preventive ethics safeguards exist precisely to avoid requiring proof of corruption after benefits are secured. When those safeguards operate only reactively—through press scrutiny or congressional letters after deals are complete—self-dealing does not require illegality. It requires only that enforcement come too late. When benefits flow, and safeguards do not engage, the system has failed at the stage where proof was never meant to be necessary.
As the Congressional Research Service has noted, judicial enforcement of the Emoluments Clauses is sharply limited by standing and justiciability doctrines, leaving Congress and political processes as the primary enforcement mechanisms.
Restoring preventive safeguards does not require proving corruption; it requires mechanisms that engage before benefits flow, rather than attempting to reconstruct intent afterward.
Cases 1 through 3 show financial and regulatory safeguards failing. Case 4 shows constitutional constraints failing. Restoring preventive function requires addressing them both.
First, financial and regulatory safeguards must operate in real time. That includes mandatory disclosure when family-controlled businesses raise substantial sums in federally regulated markets, and recusal protocols with independent review when family members seek discretionary federal licenses from agencies under presidential control.
Second, constitutional and oversight mechanisms must be capable of acting prospectively. Where judicial enforcement is limited, Congress must be structurally able to review foreign government commercial engagement during an officeholder’s tenure, giving practical effect to the Foreign Emoluments Clause. And where regulatory decisions intersect with clear financial proximity to senior officials’ family interests, inspectors general must have authority to review those decisions before major fundraising or contracts occur.
These measures represent the foundational principle of preventive ethics: safeguards must engage before coincidence and corruption becomes indistinguishable, not attempt to distinguish them afterward.
The pattern of delayed response is not limited to financial oversight; constitutional constraints show a similar sequence of action first, enforcement later. Read more in Testing Constraints: Executive Power First, Constitutional Limits Later.