Trump Family-Backed Crypto Project World Liberty Financial has reignited concerns about its ability to freeze and reallocate user funds, despite promoting itself as a “community community.”
The platform said This Wednesday it will again provide properties affected in a pre-launch phishing attack that exposed the seed phrases to what it described as a “relatively small subset” of user wallets. WLFI said the compromised wallets were targeted through “third-party security lapses,” not issues with the platform or its smart contracts.
“This is not a WLFI platform or smart contract issue. Attackers gained access to user wallets through third-party security lapses,” WLFI wrote to X Post.
Reallocation will only apply to users who have completed your customer verification (KYC). Accounts belonging to users who have not completed KYC will remain frozen. WLFI initially suspended the affected wallets in September as it investigated the attack.
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WLFI blacklisted 272 wallets, 215 of which were tied to a phishing attack, while 50 of the wallets were reportedly compromised.
“We have stepped preemptively to stop hackers from draining funds and are working with the rightful owners to secure/move the assets,” WLFI wrote in a Sept. 6 x Post.
Cointelegraph contacted WLFI for details on the total value of the affected assets.
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Users are separated from control of WLFI funds
Some X users cried foul after the announcement, raising concerns about the platform’s ability to freeze and reallocate user funds without the need for a decentralized management proposal.
“I think it’s hilarious how everyone is excited that you can carpet oi -lock any wallet with your own protocol. The whole ecosystem depends on your security. Everyone will get phucked eventually,” wrote the pseudonymous blockchain developer Flick, response in WLFI’s announcement.
Other users took WLFI’s move as a sign of accountability, as the platform aims to compensate users for the September phishing attack.
“It’s good to see a project that actually takes responsibility instead of hiding behind ‘it’s not our fault’. User safety > everything,” crypto entrepreneur Defibagira wrote on a Wednesday x response.
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