World Liberty Moves User Funds Following Security Breach

World Liberty Financial (WLFI) has begun transferring user funds into safer wallets. This comes just weeks after the company carried out a large-scale token burn in an emergency response. 

These actions follow a breach that exposed weaknesses in its systems and sparked claims about illegal token sales to restricted countries.

A Security Breach That Sparked Major Action

The issue began when some WLFI user wallets were hacked before the token launch. The company explained the breach happened because of phishing attacks and exposed seed phrases from third-party services.

World Liberty froze the affected wallets in September to prevent further damage. The situation intensified when Tron founder Justin Sun’s wallet was also frozen, which sparked a public uproar. Months later, the wallet was unblocked and Sun bet massively on the token, showing his loyalty to the project. 

To rebuild user’s trust, WLFI’s team created a new system that would allow user balances to be moved into secure wallets without adding any extra risk. WLFI has now announced that users who successfully completed verification checks will soon have their funds recovered.

Users who have not yet verified their identity will still have their wallets locked until they contact the support team and follow the verification process.

WLFI Faces Security Trouble and U.S. Scrutiny

This token recovery process began shortly after another major event involving the company. An analyst from Arkham, Emmett Gallic, reported that the crypto venture had burned more than 166 million WLFI tokens, worth over 22 million dollars. 

This emergency action was taken because the company detected suspicious activity linked to those tokens. According to the analyst, the burn feature was designed for situations where an investor loses access to their wallet or when a hacker gains control of WLFI tokens. 

Meanwhile, this was the second time in recent months that the company had to use this emergency process, which raised further questions about ongoing security issues.

At the same time, WLFI began facing political pressure in the United States, especially due to its association to President Trump’s family. 

Senators Elizabeth Warren and Jack Reed asked the authorities to investigate the company. They expressed concerns that the crypto venture, linked to Trump’s family, may have sold tokens to individuals in North Korea and Russia, which would violate U.S. sanctions. 

WLFI Rejects Claims of Illegal Token Sales

WLFI strongly denied these accusations. A company spokesperson stated that every presale participant went through strict anti-money-laundering and identity checks. According to the spokesperson, the company even rejected millions of dollars from buyers who failed these tests. 

This defense is similar to earlier criticisms faced by Binance, when some lawmakers accused it of supporting crypto projects connected to Donald Trump. Those claims were dismissed, and World Liberty insists the same is true for their situation.