Trump-Linked WLFI Launches Crypto Custody Bank Amid Regulatory Scrutiny

VADODARA, January 16, 2026 — World Liberty Financial (WLFI), a DeFi project with ties to the Trump family, has established a new subsidiary, World Liberty Trust, aiming to function as a crypto custody bank pending U.S. regulatory approval. This latest crypto news highlights a strategic pivot toward institutional-grade asset management, with WLFI CEO Zach Witkoff set to chair the board, according to Bloomberg. The move follows WLFI's previous application for a U.S. banking license, positioning the firm to capitalize on growing demand for regulated custody solutions as digital asset adoption accelerates.

Market Context & Background

Market structure suggests that institutional interest in crypto custody has surged post-2024, driven by regulatory clarity and the maturation of blockchain infrastructure. Underlying this trend is the increasing need for compliant asset storage, particularly as traditional financial entities seek exposure to digital assets. WLFI's initiative mirrors broader industry shifts, where projects are navigating complex regulatory frameworks to offer banking-like services. According to the Federal Reserve's guidelines on digital asset custody, entities must meet stringent capital and operational requirements, a hurdle WLFI aims to clear with its banking license application. Consequently, this development occurs amid a neutral market sentiment, with the Crypto Fear & Greed Index at 49/100, indicating balanced investor caution and optimism.

What Happened?

On January 16, 2026, Bloomberg reported that World Liberty Financial launched World Liberty Trust, a subsidiary designed to provide asset custody services if approved as a bank. WLFI, associated with the Trump family through its CEO Zach Witkoff—son of President Trump's Middle East envoy Steve Witkoff—submitted a U.S. banking license application earlier, targeting specific operational areas including custody. The firm plans to fill its vacant Chief Financial Officer position soon, signaling readiness for expanded financial oversight. This move aligns with WLFI's DeFi roots, leveraging blockchain technology to enhance transparency and efficiency in custody operations, as detailed in their official filings.

Technical Analysis & Price Action

On-chain data indicates that Bitcoin's price action remains for assessing market impact, currently trading at $95,711, down 1.16% over 24 hours. A key Fibonacci support level at $92,000 serves as a critical order block; a breach below this zone would trigger a bearish invalidation, potentially leading to a liquidity grab toward $88,000. Conversely, a hold above $92,000 maintains the bullish structure, with resistance near $98,500 forming a fair value gap (FVG) that could attract buying pressure. Volume profile analysis shows accumulation around $94,000, suggesting institutional interest amid this news. Bullish invalidation is set at $92,000, while bearish invalidation rests at $98,500, defining clear risk parameters for traders.

By The Numbers

Why It Matters

This development matters because it bridges political influence with crypto infrastructure, potentially accelerating institutional adoption. For institutions, a regulated custody solution like World Liberty Trust could reduce counterparty risk and enhance compliance, aligning with SEC.gov requirements for asset safekeeping. Retail investors may benefit from increased market stability, but face heightened scrutiny as regulatory frameworks evolve. The move also tests the resilience of DeFi projects in traditional finance, with WLFI's banking ambitions reflecting a broader trend of crypto entities seeking legitimacy through formal channels.

Community Sentiment

Market analysts on X/Twitter express mixed views, with bulls highlighting the potential for enhanced liquidity and bearish voices cautioning about regulatory hurdles. One analyst noted, "WLFI's custody play could unlock new capital inflows, but the banking license remains a key variable." Others point to the political connections as a double-edged sword, possibly attracting scrutiny from agencies like the SEC. Overall, sentiment leans neutral, mirroring the broader market's wait-and-see approach amid ongoing developments such as the recent Bitcoin options expiry testing key levels.

Price Prediction / Future Outlook

Bullish Case: If World Liberty Trust secures its banking license, institutional capital could flow into crypto custody, boosting market confidence and driving Bitcoin toward $100,000. Historical cycles suggest that regulatory milestones often precede price rallies, as seen with ETF approvals. Market structure indicates that holding above $92,000 supports this scenario, with potential gamma squeezes in derivatives markets amplifying upward momentum.

Bearish Case: Regulatory rejection or delays could trigger a sell-off, invalidating the bullish setup and pushing Bitcoin below $92,000 toward $88,000. On-chain data shows weak support in that zone, increasing downside risk. Political scrutiny might further dampen sentiment, leading to a liquidity grab as seen in recent market corrections.