World Liberty Financial (WLFI), the crypto venture tied to the Trump family, executed a $22 million stablecoin shuffle on Monday — creating $25 million in fresh USD1 tokens and permanently burning $3 million. The net increase of $22 million in circulation mirrors the exact sum the firm said it repaid on its Dolomite loan last week: $15 million on April 9 and another $10 million on April 11.
$25M Minted, $3M Burned — Timing Raises Questions
On-chain data shows WLFI issued the new USD1 through its official custodian BitGo and simultaneously destroyed existing tokens. The matching amounts fuel debate: did WLFI repay with reserve cash and then print new stablecoins to refill its treasury, or did it mint fresh tokens specifically to cover the loan? WLFI has not responded to CoinDesk's request for comment.
The controversy erupted on April 9, when CoinDesk reported that WLFI had deposited billions of its own governance tokens as collateral on Dolomite and borrowed stablecoins against them. The move drained the platform's USD1 lending pool to near 100% utilization, meaning regular depositors expecting interest could not withdraw their funds because WLFI had borrowed almost all of them.
Justin Sun Strikes Back: 'Personal ATM' Accusation
Tron founder Justin Sun, a major backer of WLFI, slammed the team for treating users like a "personal ATM" and extracting illegitimate fees. He led the pushback from both the crypto and political communities.
WLFI responded on X, calling the concerns "FUD" and positioning itself as an "anchor borrower" generating yield for others. The venture claimed "no liquidation risk" and promised to supply more collateral if needed. It also threatened legal action against Sun.
Token Tanks 20% as Market Votes
The verdict came fast: WLFI's token fell 12% on the day of the report and has since dropped another 8%, now trading roughly 20% below its pre-scandal level.