WLFI Freezes Affected Wallets After Pre-Launch Compromise

World Liberty Financial (WLFI) froze 215 wallets due to pre-launch phishing, implemented KYC re-verification, and developed new smart contract logic to reallocate funds, clarifying external security lapses.

World Liberty Financial (WLFI), the Trump family-backed crypto project, is addressing its first security issue. It warned of the fact that a subset of user wallets was subject to compromises of a phishing nature. This was at about the same time as its token launch.

WLFI Addresses Pre-Launch Security Breaches

In an X post on Thursday, the WLFI team reported that some wallets were hacked before the platform’s go-live. This occurred either by phishing attacks or by uncovered seed phrases. WLFI revealed that there were a small number of compromised user wallets prior to launch.

1/ Prior to WLFI’s launch, a relatively small subset of user wallets were compromised via phishing attacks or exposed seed phrases.

Since then, we’ve tested new smart contract logic to safely reallocate user funds and verified users’ identity via KYC checks.

Shortly, users who…

— WLFI (@worldlibertyfi) November 19, 2025

This incident was caused due to phishing or exposed seed phrases. The platform responded by freezing affected wallets. They started KYC re-verification as well. New logic was introduced into smart contracts to transfer funds to secure wallets.

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WLFI stressed that the incident had nothing to do with its platform or contracts. It was fbased on third party security problems. In addition, Funds will be shifted to users that complete verification. This process is all about safety first, and speed second.

Measures Implemented to Address Compromise and User Concerns

Before the launch of WLFI, there was a relatively small subset of user wallets being compromised. This was done through phishing attacks or through exposed seed phrases. Since then the team tried out new smart contract logic. This was to reallocate user funds in a safe manner. They also verified the identity of users with the help of KYC check.

This was not a WLFI platform smart contract issue. Attackers got access to user wallets due to third-party security lapses. In September, affected wallets were frozen. Ownership was checked to ensure a smooth transition.

Compromised users were asked to re-complete KYC. This verified identity before putting out new wallets. In parallel, a brand-new smart contract logic was created and tested. This caters for bulk reallocations – to protect WLFI users.

The reallocation will start soon. This is applicable to all wallets who did the verification steps. Wallets of users who have not contacted or verified will be frozen. Those users can start the process through the help center.

The team took a number of measures. Wallet freezes were experienced on around 215 wallets. This blocked hackers from draining funds. KYC re-verification was mandated for afflicted users. Fund reallocation was done by new smart contract logic to properly transfer funds safely.

Criticism and The Path Forward

Money will be transferred to verified users. The wallets of unverified users will be frozen. In addition, the company was more interested in the safety of funds than in the speed of the process even though they were slower.

Moreover, the project faced criticism. The capability for freezing user wallets goes against decentralization, some argue. Well-known wallets that were blacklisted included TRON founder Justin Sun, leading to controversy and a drop in the value of the tokens.

Lastly, this situation raises the challenges of security in decentralized finance. WLFI’s response focuses on user protection and regulatory compliance. However, it also raises debate on fundamental crypto principles.