Trump-linked Crypto Project WLFI Faces Backlash Over Withdrawal Freeze

World Liberty Financial (WLFI), a politically connected cryptocurrency initiative, is under fire after reports that some investors have been blocked from accessing their holdings.

Bruno Skvorc, founder of NFT startup RMRK and an early contributor to Ethereum 2.0, claims the project’s compliance team denied him access to his purchased tokens. While his wallet was valid when deposits were made, it was later branded “high risk” when he attempted to withdraw. Skvorc described the experience as investors being trapped without recourse, comparing WLFI’s approach to a “mafia-style system.” He also pointed out that several others have faced similar restrictions.

https://twitter.com/bitfalls/status/1964213177245159656

Automated risk tools at fault?

Blockchain analysts suggested the issue stems from automated compliance filters widely used in the industry. According to ZachXBT, wallets can be flagged as “high risk” for minor or indirect reasons, such as interacting with DeFi protocols or passing funds through exchanges that were later sanctioned. In Skvorc’s case, links to Tornado Cash activity, indirect exposure to Russian trading platforms like Garantex, and use of a now-blacklisted dashboard appear to have triggered WLFI’s restrictions, despite no direct rule violations.

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Growing scrutiny of WLFI

This is not the first controversy surrounding the token. The project recently endured extreme volatility, with a 40% price crash wiping out millions from major holders, even after burning 47 million tokens to support value. The latest freeze adds to concerns about transparency, governance, and whether political connections are insulating WLFI from accountability.

For critics like Skvorc, the takeaway is stark: without stronger oversight, investors risk losing access to their assets in a system where decisions can be made unilaterally and without appeal.