Trump-Backed Crypto Project Sparks Centralization Fears After Freezing User Funds
The crypto project World Liberty Financial (WLFI), which has the backing of the Trump family, has raised concerns about its ability to freeze and reallocate user funds, despite marketing itself as a “community-managed” platform. In a recent announcement, WLFI revealed that it would be reallocating assets from user wallets that were affected by a pre-launch phishing attack, which exposed the seed phrases of a “relatively small subset” of users.
The platform attributed the attack to “third-party vulnerabilities” rather than any issues with its own smart contracts or platform. “This was not a WLFI platform or smart contract issue. Attackers gained access to user wallets through third-party vulnerabilities,” WLFI stated in a post on X. The reassignment of assets only applies to users who have completed Know Your Customer (KYC) verification, while accounts of users who have not completed KYC will remain blocked.
Source: Worldlibertyfi
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WLFI had previously blacklisted 272 wallets, with 215 related to the phishing attack and 50 reported as compromised. The platform took action to prevent hackers from accessing the affected funds and is working with the rightful owners to secure and move assets. Cointelegraph has reached out to WLFI for more information on the total value of the affected assets.
Source: Worldlibertyfi
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User Reactions to WLFI’s Decision
Some users have expressed concerns about WLFI’s control over user funds, with pseudonymous blockchain developer Flick stating, “I find it hilarious how everyone is cheering about the fact that you can lock or lock any wallet with its own protocol. The entire ecosystem depends on your security. In the end, everyone gets tricked.” However, others have viewed WLFI’s move as a responsible step towards compensating users affected by the phishing attack.
Crypto trader DefiBagira commented, “Good to see a project actually taking responsibility instead of hiding behind ‘not our fault’. User security > everything.” The incident has sparked a debate about the balance between user security and decentralization in crypto projects.
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