Key Takeaways
- HTX delisted USD1 effective June 7 and is converting all user holdings to USDT at a 1:1 ratio.
- The freeze is the second time WLFI has activated its on-chain blacklist mechanism, following the September 2025 blocking of Justin Sun’s personal wallet.
- The UK sanctioned designated Huobi Global S.A. on May 26 for allegedly facilitating more than $1.5 billion in Russia-linked flows.
Crypto exchange HTX (formerly Huobi) fully suspended support for World Liberty Financial’s USD1 stablecoin on June 7 at 03:00 UTC, converting all user holdings to Tether at a one-to-one ratio. The delisting followed what HTX described as a unilateral decision by the WLFI project team to restrict onchain addresses associated with the exchange.
In its statement, HTX said the WLFI project team had “unilaterally imposed a freeze on specific HTX onchain addresses based on sanctions compliance reviews,” adding that “the onchain circulation of certain WLFI assets associated with these addresses has been restricted.”
HTX spokesperson Molly Fu stated on X that the affected assets “are not assets belonging to any sanctioned entity” but rather “assets legally purchased and owned by individual users.”
The exchange called on WLFI to immediately unfreeze the affected addresses.
HTX criticized World Liberty Financial’s action as taken without sufficient prior communication and said it lacked contractual or legal grounds as well as transparent disclosure procedures.
The exchange said it is reviewing measures, including legal action, to protect user rights and interests.
World Liberty Financial has not publicly confirmed whether it froze the HTX-linked addresses. The project posted on X states, “In light of recent sanctions updates, World Liberty Financial maintains risk-based sanctions compliance controls,” without specifically addressing the HTX situation.
UK Sanctions Against Huobi Global S.A. Provided the Compliance Backdrop
The freeze stems directly from UK sanctions designating Huobi Global S.A., a Panama-registered entity tied to HTX, on May 26, 2026, under Russia Sanctions regulations. The UK cited suspected facilitation of over $1.5 billion in flows intended to support Russian sanctions evasion.
HTX has maintained that the sanctioned entity, Huobi Global S.A., is distinct from the online HTX exchange and that the UK designation should not impact HTX’s platform or user funds.
The distinction is material: HTX’s argument is that WLFI acted on a sanctions designation that does not legally apply to the exchange itself, making the freeze, in HTX’s view, without adequate contractual or legal basis.
HTX had already suspended trading for four pairs as of June 5: WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1, before the full delisting took effect on June 7.
This Is the Second Time WLFI Has Activated Its Onchain Freeze Capability
The dispute marks at least the second high-profile use of WLFI’s onchain freeze function. The Trump-linked project blacklisted Tron founder Justin Sun’s wallet in September 2025 after he moved roughly $9 million of WLFI tokens between addresses, including HTX, where he serves on the exchange’s Global Advisory Board.
Sun subsequently sued the project, alleging that the WLFI contract includes a hidden backdoor that allows the team to freeze investor tokens without notice or consent.
In May, World Liberty Financial filed a defamation lawsuit against Sun, accusing him of making false statements about the platform and of breaching WLFI token sale terms through prohibited transfers and other conduct.
HTX was an early supporter of World Liberty Financial and the first major exchange to list USD1 on May 6, 2025. The fallout is therefore also a commercial reversal: the exchange that gave USD1 its earliest institutional platform is now the one converting all user holdings away from it.
The Broader Question: Who Controls a Stablecoin’s Circulation?
Centralized stablecoins, including Tether’s USDT and Circle’s USDC, include administrative blacklist functionality embedded in their smart contracts. The issuer retains the ability to freeze or block addresses at the contract level, a power that operates independently of any exchange or wallet provider holding those tokens.
The HTX situation illustrates what that power looks like in practice when it is exercised against a party that disputes the legal basis for the restriction.
The exchange had no ability to prevent the freeze at the onchain level; its only available response was to delist the asset entirely and absorb the operational cost of converting user balances.
World Liberty Financial lists President Donald Trump and his sons Donald Jr., Eric, and Barron as co-founders.
The project has not responded to specific questions about the HTX address freeze or addressed HTX’s demand to reverse the restriction.
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Guneet Kaur is a senior editor at CCN.com and a Science Fellow at Exponential Science. She is a fintech and blockchain expert with extensive experience in digital finance education, blockchain ecosystems, and cryptocurrency markets. She has worked with global media such as Cointelegraph, as well as education and blockchain platforms, to design and lead strategic content and learning initiatives. As an educator and assessor for top-tier executive programs, she bridges real-world fintech trends with academic insight.
Dr. Kaur is also a published researcher and peer reviewer across fintech and data science journals, including Financial Innovation Journal and International Journal of Big Data Intelligence and Applications. Her work spans data-driven analysis, Web3 innovation, and technical content development. With a strong foundation in both industry and academia, she translates complex financial technologies into practical applications, empowering learners, professionals, and institutions across the rapidly evolving digital finance landscape.
