Exchange moves to protect retail customers as stablecoin issuer halts transfers
HTX began converting retail customer balances from World Liberty Financial’s USD1 stablecoin to Tether on June 7, 2026, after the issuer froze wallets connected to the exchange. The conversion occurs at a one-to-one valuation and marks the permanent removal of USD1 from HTX’s trading platform.
HTX suspended trading in four USD1 pairs on June 5 at 13:00 UTC: WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1. The exchange cited the need to “safeguard users’ assets, preserve market fairness, and mitigate potential systemic risks,” according to HTX management.
The freeze follows a broader compliance dispute. World Liberty Financial, which launched in late 2024 and is backed by members of the Trump family, possesses unilateral authority to halt token transfers via smart contract functions. The stablecoin’s architecture allows administrators to freeze holdings without prior notice to affected parties.
HTX spokesperson Molly Fu stated: “The locked capital belongs exclusively to ordinary retail buyers and possesses no connection to sanctioned actors.” The exchange has not disclosed the exact amount of USD1 held in frozen wallets.
World Liberty Financial has not provided a formal statement detailing its evidentiary standard for the freeze or the specific violations it alleges. The issuer issued only a broad market advisory reminding counterparties of its compliance protocols without naming HTX directly.
The dispute intensified following UK sanctions imposed on May 26 against Huobi Global S.A., a Panamanian entity, for allegedly processing $1.5 billion in illicit volume connected to Russian financial evasion networks including the A7 payments network and Garantex. HTX argues it operates independently from Huobi Global S.A., the legacy entity named in the sanctions.
World Liberty Financial has a history of unilateral asset freezes. In September 2025, the issuer froze the personal holdings of Justin Sun, the billionaire founder of Tron blockchain and global advisor to HTX. World Liberty alleged Sun violated early investor agreements, engaged in unauthorized short sales, and executed prohibited straw purchases. Sun rejected the allegations and claimed governance voting rights were unfairly stripped, arguing that punishing dissenting token holders violated decentralized finance principles.
USD1 currently has a circulating supply of $4.6 billion. The underlying WLFI token has a circulating supply of 31.77 billion, a market cap of $1.76 billion, and a fully diluted valuation of $5.54 billion, with 24-hour trading volume of $30.87 million.
Leading fiat-backed stablecoins including Tether and Circle’s USDC routinely freeze individual wallets linked to criminal enterprises, terrorism financiers, or North Korean hacking syndicates. USD1 has been pitched to institutional players as a regulated, heavily audited alternative to legacy stablecoins. HTX did not specify whether customers will receive compensation for any losses resulting from the forced conversion.
