Binance now custodies 89% of Trump family-linked stablecoin USD1

Binance now custodies an overwhelming 89% of the Donald Trump-linked USD1 stablecoin, according to blockchain intelligence platform Arkham.

USD1 is the dollar-pegged token issued by World Liberty Financial, the crypto venture backed by the US president’s family, with $5.4 billion in circulation, DefiLlama data shows.

“Liquidity follows user demand and we work hard to meet demand and serve our users,” Jessica Jung, a member of Binance’s global PR team, told DL News.

To be sure, Binance’s custody of USD1 tokens does not mean the crypto exchange owns them. External custodial services are common in the finance industry.

Still, no other major stablecoin has such a high proportion parked on a single third-party exchange, underscoring Binance’s central role in the token’s liquidity, distribution, and custody.

In December, Binance launched a programme aimed at promoting the use of USD1. It offers up to 20% yield on USD1 holdings of up to $50,000.

“Our involvement with World Liberty Financial–related products, including USD1, is limited to standard listing, infrastructure, and market-access services that we provide to a wide range of projects on consistent terms,” Jung said.

USD1’s value is backed by US government bonds, dollar deposits and other cash equivalents.

In January, World Liberty Financial applied for a US banking license.

“We believe the best path to broader adoption, including everyday transactions, is to establish USD1 as the preferred stablecoin for major institutions, enterprises, and consumers, too,” co-founder Zak Folkman told DL News at the time.

Critics cry foul

USD1’s rapid growth — now the fifth largest stablecoin by circulation after jumping over 50% in the past month — comes at a time when criticism of the president’s family involvement in the crypto industry is mounting.

House Democrats have accused the 79-year-old of self-dealing, foreign influence, and obstruction of justice stemming from his family’s involvement in crypto.

In November, a 60 Minutes investigation linked the $2 billion investment deal between Binance and Abu Dhabi’s MGX to Trump’s presidential pardon for the exchange’s co-founder Changpeng Zhao.

Critics say the deal, which was conducted with USD1, was done as a favour in exchange for the pardon.

Binance CEO Richard Teng, and Zhao’s lawyer Teresa Goody Guillen, have both dismissed claims that the exchange helped boost USD1 before Zhao received the pardon.

The White House has repeatedly dismissed allegations of any wrong-doing.

“President Trump’s assets are in a trust managed by his children. There are no conflicts of interest,” Anna Kelly, the deputy press secretary, told DL News in January.

Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.