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The Trump family-backed crypto project World Liberty Financial has reignited concerns about its ability to freeze and reassign user funds, despite promoting itself as “community governed.”
The platform <a href="https://x.com/worldlibertyfi/status/1991243561715519933" rel="noopener noreferrer nofollow" target="_blank">said</a> Wednesday that it will reallocate assets affected in a pre-launch phishing attack that exposed the seed phrases of what it described as a “relatively small subset” of user wallets. WLFI said the compromised wallets were targeted through “third-party security lapses,” not issues with the platform or its smart contracts.
“This was not a WLFI platform or smart contract issue. Attackers gained access to user wallets through third-party security lapses,” wrote WLFI in the X post.
The reallocation will only apply to users who have completed Know Your Customer (KYC) verification. Accounts belonging to users who have not completed KYC will remain frozen. WLFI first halted the affected wallets in September as it investigated the attack.
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 <img src="https://s3.cointelegraph.com/uploads/2025-11/019aa074-9f74-7e62-8289-2988e73e0193" title="" alt="WLFI’s ‘community governed’ image strained as Trump-backed project freezes wallets">
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 Source: <a href="https://x.com/worldlibertyfi/status/1991243561715519933" rel="noopener noreferrer nofollow" target="https://x.com/worldlibertyfi/status/1991243561715519933">Worldlibertyfi</a>
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Related: <a href="https://cointelegraph.com/news/wlfi-advisor-longs-2-2m-avax-10x-leverage-550m-avalanche-treasury-announcement" rel="noopener noreferrer nofollow">World Liberty adviser bets millions as corporate treasuries fuel AVAX rally</a>
WLFI blacklisted 272 wallets, 215 of which were tied to a phishing attack, while 50 of those wallets reported being compromised.
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 <img src="https://s3.cointelegraph.com/uploads/2025-11/019aa074-a188-7806-9ea7-d43a3a9af990" title="" alt="WLFI’s ‘community governed’ image strained as Trump-backed project freezes wallets">
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 Source: <a href="https://x.com/worldlibertyfi/status/1964081168602591494" rel="noopener noreferrer nofollow" target="https://x.com/worldlibertyfi/status/1964081168602591494">Worldlibertyfi</a>
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“We stepped in preemptively to stop hackers from draining funds and are working with the rightful owners to secure/move assets,” wrote WLFI in a Sept. 6 X <a href="https://x.com/worldlibertyfi/status/1964081168602591494" rel="noopener noreferrer nofollow" target="_blank">post</a>.
Cointelegraph has contacted WLFI for details on the total value of affected assets.
Related: <a href="https://cointelegraph.com/news/trump-tokenized-luxury-resort-development-maldives" rel="noopener noreferrer nofollow">Trump Organization to tokenize Maldives resort development for early investors</a>
<h2 id="users-split-over-wlfi-s-control-of-funds">Users split over WLFI’s control of funds</h2>
Some X users cried foul after the announcement, raising concerns about the platform’s ability to freeze and reassign user funds without the necessity of a decentralized governance proposal.
“I think it’s hilarious how everyone is cheering that you can rug or lock any wallet on your own protocol. The entire ecosystem is dependent on your security. Everyone will get phucked in the end,” wrote pseudonymous blockchain developer flick, in <a href="https://x.com/0xFlick/status/1991277148389454105" rel="noopener noreferrer nofollow" target="_blank">response</a> to WLFI’s announcement.
Other users took WLFI’s move as a sign of accountability, as the platform aims to compensate users for the September phishing attack.
“Good to see a project actually taking responsibility instead of hiding behind ‘not our fault’. User safety &gt; everything,” wrote crypto trader DefiBagira in a Wednesday X <a href="https://x.com/defibagira/status/1991243889903096297" rel="noopener noreferrer nofollow" target="_blank">response</a>.
Magazine: <a href="https://cointelegraph.com/magazine/bo-hines-us-president-donald-trump-crypto-job-tether-usa/" rel="noopener noreferrer nofollow">Quitting Trump’s top crypto job wasn’t easy: Bo Hines</a>

WLFI’s ‘community governed’ image strained as Trump-backed project freezes wallets

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