J. Benjamin Greenberg, a former Circle software engineer, filed a derivative lawsuit against President Donald Trump in federal court in Washington on October 22, CNBC reported. The suit, Greenberg v. Trump, No. 26-cv-03686, targets two transactions tied to Sheikh Tahnoon bin Zayed Al Nahyan, the United Arab Emirates' national security adviser, and alleges violations of the Constitution's Foreign Emoluments Clause.

Two UAE Deals, One Before the Inauguration and One After

In the first transaction, an entity backed by Sheikh Tahnoon agreed to pay $500 million for a 49% stake in World Liberty, four days before Trump's January 2025 inauguration. In the second, announced in May 2025, MGX, an Abu Dhabi state-backed fund chaired by Tahnoon, used World Liberty's USD1 stablecoin to settle a $2 billion investment in Binance.

The Foreign Emoluments Clause bars federal officeholders from accepting benefits from foreign states without the consent of Congress. Written to keep foreign governments from cultivating influence over U.S. officeholders, the provision has rarely been tested to a decision on its merits. The first deal was agreed before Trump took office; the second came while he was president.

Besides Trump and World Liberty, the suit names U.S. official Steve Witkoff, the holding companies WLF Holdco and Stablecoin Holdco, and DT Marks DEFI LLC, which reports describe as the vehicle through which the Trump family collects World Liberty revenue. A spokesperson for Witkoff did not immediately respond to CNBC.

What the Complaint Says the Trump Family Gained

Greenberg also cites administration decisions he argues benefited the Trump family. They include a 2025 Commerce Department approval of advanced Nvidia chip sales to an Abu Dhabi AI company chaired by Tahnoon, and a Treasury bureau's conditional approval in August 2026 of a World Liberty trust bank co-owned by the Trump family and the UAE government, according to Spectrum News.

"He needs to be held accountable," Greenberg said in a statement.

The defendants reject the allegations. White House spokesperson Anna Kelly told CNBC the case is "frivolous," described it as a repeat of claims Democrats have made against the president for a decade, and said there are no conflicts of interest. World Liberty spokesperson David Wachsman said the company complies with all U.S. laws and regulations, that the claims are without merit, and that it looks forward to resolving them in court.

The Injury Claim Runs Through Reserve Income

Greenberg's case for harm rests on how stablecoin issuers make money. USD1 and USDC are both designed to stay at $1, so their issuers earn interest on the reserves backing tokens in circulation rather than gains on the token price. That structure makes circulation the competitive prize in stablecoins: whichever issuer's token is chosen for a large settlement holds the interest-bearing reserves, and the income scales with the dollars parked behind the token. In the second quarter of 2026, Circle reported $668 million in reserve income out of $701 million in total revenue and reserve income — about 95% — at a reserve return rate of 3.48%, according to its quarterly filing.

At that return rate, $2 billion would generate roughly $70 million a year in gross reserve income before distribution costs and revenue sharing. The arithmetic gives a sense of scale, not a damages figure. Circle passes much of its income on to partners: distribution, transaction, and other costs totaled $412 million in the second quarter.

On the USD1 side, World Liberty's disclosures say BitGo and World Liberty affiliates are entitled to interest from the reserve assets, and that a Trump-affiliated entity holds an indirect economic interest in the business.

The complaint alleges that presidential influence steered demand toward USD1 and away from USDC. To prove injury, Greenberg will have to show that the $2 billion would otherwise have gone to Circle. Binance was already a USDC channel: in December 2024, the exchange agreed to expand USDC's availability and adopt it for its corporate treasury. That shows a route existed, not that MGX would have taken it.

Circle Did Not Bring the Case

"Circle did not initiate, direct, authorize, or participate in the filing," a Circle spokesperson told CNBC.

In a derivative suit, a shareholder sues on the company's behalf when its board has not acted. Federal Rule of Civil Procedure 23.1 requires the shareholder to describe in detail any request made to the directors, or explain why asking would have been futile. The shareholder must also have owned shares when the challenged transactions occurred — which is where Greenberg's equity pay as a Circle employee becomes relevant.

Greenberg says he holds about 10,000 Circle shares and did not ask the board to act. He argues a demand would have been futile because Circle's dependence on regulators and its commercial relationships prevent an impartial decision. Circle's ties to Binance, the exchange at the center of the USD1 deal, deepened a month before the filing: on September 22, Circle announced a $100 million equity investment from Binance and a renewed five-year commercial agreement.

Earlier Emoluments Suits Ended Without a Ruling

The Supreme Court ended the first two emoluments cases days after Trump left office in 2021, before any financial records were turned over and without deciding whether he had violated the clause. Because those cases never reached the underlying conduct, how the clause applies to a sitting president's private business income remains an open legal question. Greenberg's suit also rests on competitive harm, but he sues on behalf of a rival company and measures the harm in lost reserve income.

What Greenberg Is Asking For

He asks the court to declare the deals unconstitutional, bar further violations, order an accounting of foreign-linked benefits, and direct private-company defendants to give up gains, to the U.S. Treasury or as the court decides. He also seeks unspecified damages and restitution from the World Liberty defendants. Lawmakers have pursued a separate route, with efforts to bar elected officials from issuing or sponsoring crypto assets.

No court response from the defendants has been reported yet. Before reaching the merits, the court will have to settle a threshold question: whether Greenberg can sue on Circle's behalf at all. In derivative actions, objections to standing and demand futility typically surface in a defendant's first court filings, so the earliest procedural moves will determine whether the constitutional claims are ever reached.

This article is provided for informational purposes only and does not constitute legal, financial, or investment advice.