The Freezing Allegations
Published 6/8/2026, 4:43:15 PM
HTX (formerly Huobi) delisted the Trump-linked USD1 stablecoin on June 7, 2026, following a severe dispute over the freezing of exchange-linked on-chain addresses. The exchange cited the need to "reduce potential risks" and "ensure the safety of user assets" after the World Liberty Financial (WLFI) team unilaterally froze assets associated with HTX users [Source: https://finance.yahoo.com/markets/crypto/articles/htx-delists-trump-linked-usd1-130715413.html].
The Freezing Allegations
The conflict originated from a disagreement over compliance and asset control between HTX and the Trump-backed WLFI project:
- HTX's Allegation: The exchange claimed WLFI froze on-chain addresses without "sufficient prior communication, adequate contractual or legal grounds, transparent disclosure, or adherence to due process" [Source: https://finance.yahoo.com/markets/crypto/articles/htx-delists-trump-linked-usd1-130715413.html]. HTX spokesperson Molly Fu emphasized that the frozen assets belonged to individual retail users rather than sanctioned entities.
- WLFI's Justification: The WLFI team stated the freeze was part of "sanctions compliance reviews." This followed a May 26, 2026, move by the UK government to sanction Huobi Global S.A., alleging the entity facilitated over $1.5 billion in flows supporting Russian sanctions evasion [Source: https://chainalysis.com/blog/uk-sanctions-crypto-entities-russian-trade-blockade-evasion-may-2026/].
Delisting Timeline and Asset Protection
HTX moved quickly to sever ties with the project to prevent further user losses:
| Event | Date | Action Taken |
|---|---|---|
| UK Sanctions | May 26, 2026 | UK sanctions Huobi Global S.A. for alleged Russian trade evasion. |
| Trading Suspension | June 5, 2026 | HTX halts trading for WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1. |
| Official Delisting | June 7, 2026 | USD1 is officially removed from the platform at 03:00 UTC. |
| Asset Conversion | June 2026 | HTX initiates a 1:1 conversion of USD1 holdings to USDT for users. |
Legal and Political Context
The delisting is a flashpoint in a broader legal battle between HTX's de facto leader, Justin Sun, and the Trump family's DeFi venture. Sun filed a lawsuit alleging WLFI maintained a "blacklist" mechanism capable of destroying user assets without cause. In response, WLFI filed a countersuit for defamation, accusing Sun of using social media bots to orchestrate a campaign of market manipulation against the USD1 stablecoin [Source: https://finance.yahoo.com/markets/crypto/articles/htx-delists-trump-linked-usd1-130715413.html].
The situation remains unresolved as both parties pursue litigation regarding the legality of the initial asset freeze and the subsequent impact on market liquidity.
Next Steps:
- Would you like to monitor the social sentiment and price volatility of the WLFI token across other exchanges?
- I can perform a contract security check on the USD1 stablecoin to verify the existence and permissions of the "blacklist" mechanism mentioned in the lawsuit.