UFC fighters at the White House got paid with Trump family stablecoins—but an ethics expert says a gap in the law allows this

Trump’s Ultimate Fighting Championship Freedom 250 spectacle on the White House South Lawn resulted in record bonuses for the winners. The fighters, though, didn’t get paid in U.S. dollars, which would seem to be the obvious currency for such an event. Instead, the prize money came in the form of USD1, a type of synthetic dollar known as a stablecoin, that is run by the Trump family’s cryptocurrency business, World Liberty Financial.

This arrangement created an ethics scenario that would otherwise be illegal for most federal officials and could be treated as a crime, said Richard Painter, a former chief White House ethics lawyer in the George W. Bush administration.

“If a Treasury secretary had a financial interest in World Liberty and then participated in any government matter that had a knowing economic impact on World Liberty, that Treasury secretary very likely would commit a felony,” Painter told Fortune.

Under the federal criminal statute 18 U.S.C. § 208, Painter noted, most executive branch employees are barred from taking part in official matters that clearly affect their own financial interests or those of close associates. The president, vice president, and members of Congress, however, are exempt.

In Trump’s case, that exemption allows him to take part in events that feature World Liberty Financial, which issues USD1. Stablecoins like USD1 are backed by cash and government debt, and their issuers earn interest on ...