Skvorc attached the email response he received from WLF to his X post, which noted that the firm would “not be able to unlock” his tokens. The firm justified the freezing of the tokens “due to the high risk blockchain exposure associated with” Skvorc’s wallet.
Since WLF started trading on Sept. 1, the protocol has blocked at least 272 wallets. Denouncing the protocol as “the scam of all scams,” Skvorc noted:
“This is the new age mafia. There is no one to complain to, no one to argue with, no one to sue. It just… is.”
Additionally, Sun noted that a great financial brand must be rooted in “fairness, transparency, and trust.” And not “on unilateral actions that freeze investor assets,” he wrote, adding:
“Such measures [freezing user assets] not only violate the legitimate rights of investors, but also risk damaging broader confidence in World Liberty Financials.”
“WLFI only intervenes to protect users, never to silence normal activity.”
The firm further added that the move was made “solely to prevent harm” while it investigated and helped impacted users.
WLF also shared a breakdown of the blacklisted wallets, which showed that 79% of the blocked wallets were linked to a phishing attack. The firm claimed that it had preemptively frozen the 215 wallets to prevent hackers from draining the funds. WLF said it is working with the rightful owner of the wallets to secure their respective assets.
The breakdown also revealed that WLF blocked 50 wallets at the owners’ request after they reported that their wallets were compromised. Only five wallets were flagged for high-risk exposure, whose security risks are currently under review, as per WLF.
Additionally, WLF blocked one wallet for suspected misappropriation of other users’ funds. The firm said it will continue to work with users to verify control and secure funds, and share clear outcomes for each category of wallets once reviews are concluded.
On-chain sleuth ZachXBT praised WLF’s approach but cautioned against the reputational risks of blacklisting false positives. ZachXBT noted:
“The issue is majority of the time “high risk” exposure is incorrect so you cannot become reliant on compliance tools as a team.”
ZachXBT wrote that all of the top compliance tools are flawed, and WLF is doing a better job than others like Circle, but warned that most teams fail to find the right balance.
