Trump-Backed DeFi Protocol WLFI Sells Bitcoin to Avert Liquidation Amid Crypto Turmoil
In a significant move amidst the cryptocurrency market’s intense volatility, World Liberty Financial (WLFI), a decentralized finance (DeFi) protocol reportedly supported by former U.S. President Donald Trump’s family, has been compelled to sell a substantial amount of Bitcoin. The protocol faced severe liquidation pressure from lending platforms, a development that has captured considerable market attention.
WLFI’s Urgent Bitcoin Sale to Repay Debts
On-chain data platform Arkham Intelligence tracking indicates that World Liberty Financial’s official wallet executed a sale of over 170 Bitcoins on Wednesday. The transaction, priced at approximately $67,000 per BTC, generated roughly $11 million in proceeds. This capital was immediately funneled into Aave, a prominent lending protocol, to repay outstanding loans and stave off potential liquidation.
WLFI Token Faces Steep Decline
The forced asset liquidation coincides with persistent downward pressure on the WLFI token’s price. According to CoinGecko data, the WLFI token experienced a sharp decline of over 15% today, significantly underperforming both Bitcoin and Ethereum, which saw approximate 10% drops during the same period.
Since its official launch in September last year, WLFI’s price trajectory has been consistently bearish. Initially priced around $0.23 on its debut day with a market capitalization of $6.6 billion, the token has since plummeted to approximately $0.109, marking a cumulative decline exceeding 65%.
Mounting Political and Regulatory Scrutiny
Beyond its immediate financial challenges, World Liberty Financial is also navigating a growing storm of political and regulatory controversies. Political adversaries of the Trump camp have recently intensified calls for thorough investigations into the DeFi protocol’s operations and affiliations.
U.S. Representative Ro Khanna publicly announced on Wednesday that an investigation has been launched into a $500 million equity investment made by an entity from the United Arab Emirates (UAE) into World Liberty Financial. Khanna has explicitly demanded full transparency regarding the funding sources and any associated interests in this transaction.
Adding to the protocol’s challenges, U.S. Senators Elizabeth Warren and Jack Reed had previously raised serious concerns in November last year, alleging potential connections between World Liberty Financial and malicious actors in North Korea and Russia. As of now, the public remains largely unaware of any substantial progress in these ongoing investigations, leaving a cloud of uncertainty over the protocol’s future.
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