NewsBTC
Nov 21, 2025
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WLFI Freezes Wallets After Breach, Faces Federal Investigation

World Liberty Financial (WLFI) Security Breach:

  • WLFI is reallocating funds and confirming user identities after multiple wallets were compromised prior to its platform launch.
  • The breaches resulted from phishing attacks or exposed seed phrases, not from the platform itself.
  • Affected addresses were frozen in September, and asset recovery is ongoing for verified users.

Emergency Response

  • WLFI executed an emergency action, burning 166.67 million WLFI tokens, valued at $22.14 million, from a compromised address to prevent further losses.
  • This measure aims to protect assets while verifying rightful ownership.

Regulatory Concerns

  • Senators Elizabeth Warren and Jack Reed have requested a review of alleged WLFI token sales linked to sanctioned entities.
  • A watchdog report connected transactions to North Korean and Iranian parties, though the link to wallet compromises remains unclear.

Industry Reactions

  • Security experts like Taylor Moynahan and Nick Bax disputed some claims in the watchdog report, suggesting misinterpretation of on-chain activities.
  • WLFI emphasizes user protection and compliance, focusing on freezing vulnerable wallets and implementing improved smart contract logic.