Trump’s WLFI Drops 10% as Sanctions Tie and $440M Collateral Bet Collide
WLFI token dropped nearly 10% amid controversies involving business ties to a sanctioned group and risky treasury operations. The company unknowingly partnered with a blockchain project linked to a sanctioned individual and has leveraged a large portion of its treasury tokens for borrowing, raising concerns about financial stability. These developments have triggered significant market uncertainty and potential liquidity risks for WLFI.
World Liberty Financial’s WLFI token fell nearly 10% on April 9, hitting $0.0888 — its lowest since the token’s late-2025 debut. Two separate controversies landed in quick succession, giving sellers little reason to hold. WLFI is simultaneously facing questions about who it does business with and what it is doing with its own treasury. A Partner With Inconvenient History An investigation by The Times, published April 7, found that WLFI had integrated its USD1 stablecoin with AB DAO, a Southeast Asian blockchain project. AB DAO had, until weeks before the deal, been promoting a resort linked to Cambodia’s Prince Group. US and UK authorities sanctioned Prince Group founder Chen Zhi in November, seizing $15 billion in bitcoin over alleged involvement in large-scale online fraud. WLFI says it conducted due diligence and has no relationship with sanctioned individuals. The Times found the company was unaware of AB DAO’s prior ties when the deal was signed. The episode follows earlier allegations — denied by WLFI — of token sales to wallets linked to Iran, North Korea, and Russia. Treasury Moves Raise Hard Questions BeInCrypto reported on April 8 that WLFI’s treasury had deposited 3 billion tokens into Dolomite and borrowed over 50 million USD1, pushing the pool’s utilization past 100%. On-chain data shows WLFI’s official treasury multisig — a wallet holding over $1.1 billion in assets and publicly tagged by Etherscan as “World Liberty: Multisig” — routed approximately 5 billion WLFI tokens through an intermediary wallet created specifically for this operation before depositing the full amount into Dolomite. Against the deposited collateral, the team borrowed 65.4 million USD1 and 10.3 million USDC, then sent over 40 million USD1 to Coinbase Prime. The collateral position is now valued at $440 million as of April 9, per Dolomite’s stats page. WLFI trades with limited market depth, making forced liquidation nearly impossible without crashing the token’s own price. A cas...
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