HTX Delists USD1 Stablecoin Amid Escalating Conflict with World Liberty Financial Over Frozen Assets

The cryptocurrency exchange HTX is embroiled in a rapidly escalating dispute with World Liberty Financial (WLF). In a decisive move on May 6, HTX announced the complete delisting of the USD1 stablecoin, issued by WLF, following the controversial freezing of its on-chain addresses. HTX has committed to converting all eligible users’ USD1 holdings to USDT at a 1:1 ratio, ensuring asset liquidity amidst the contention.

According to an official statement from HTX, the delisting process was finalized on June 7 at 3 AM UTC. Any remaining USD1 held by eligible users was automatically converted to USDT, the market’s leading stablecoin. Prior to this, HTX had already suspended all associated trading pairs, including WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1, effective June 5 at 1 PM.

HTX Accuses WLFI of Unilaterally Freezing User Assets, Citing Rights Infringement

The core of the conflict ignited with WLF’s recent actions to freeze HTX’s on-chain addresses. WLF, a project reportedly endorsed by the Trump family and responsible for issuing WLFI and USD1 stablecoins, justified its actions by citing a “sanction compliance review.”

HTX vehemently criticized this move in its statement: “The WLFI team unilaterally and forcibly froze specific addresses without sufficient prior communication, a clear legal basis, contractual foundation, or adherence to transparent, legitimate procedures.”

HTX asserts that such actions directly infringe upon the legitimate rights of its users to hold their assets securely.

Reinforcing this stance, HTX spokesperson Molly Fu publicly addressed the issue on social platform X, stating, “These frozen funds absolutely do not belong to any sanctioned entities; they are personal property legitimately purchased and owned by general retail investors.” The exchange has issued a strong demand for the immediate unfreezing of all affected user funds by the WLFI team.

UK Sanctions and Allegations of Russian Money Laundering Complicate the Narrative

The backdrop to this asset freezing saga appears to be intertwined with broader geopolitical and financial sanctions. On May 26, the UK government added “Huobi Global S.A.” to its sanctions list. British authorities allege that this entity facilitated the processing of up to $1.5 billion in funds through the A7 network and the Russia-linked Garantex exchange, effectively aiding Russia in circumventing international sanctions.

HTX has strongly refuted these accusations, clarifying that “Huobi Global S.A.” – the entity subject to sanctions – is distinct and entirely separate from the currently operating online trading platform “HTX.” The exchange emphasized that the UK’s sanction order will not impact its current operations or the security of user funds on the HTX platform.

Justin Sun’s Past Encounter with WLF’s “Smart Contract Backdoor” Resurfaces

Notably, this isn’t the first instance of WLF facing scrutiny over aggressive asset freezing. In a significant past incident, reportedly in September 2025, Tron founder and HTX Global Advisory Board member Justin Sun experienced his wallet being blacklisted by WLF. This occurred after he transferred approximately $9 million worth of WLF tokens to various addresses, including HTX.

Sun subsequently initiated a lawsuit against the project, alleging that WLF’s smart contract contained a “backdoor program.” This alleged backdoor allowed the WLF team to arbitrarily freeze user tokens without requiring investor consent or providing any prior notification.

As of the latest updates, WLF has not issued a direct response to HTX’s demands for delisting and unfreezing assets. However, WLF did release a routine statement on June 3, reiterating its strict adherence to sanction compliance controls and cautioning that any transactions involving sanctioned entities could be intercepted. This statement, however, did not specifically name HTX or address the current dispute.