HTX delists Trump-backed USD1 stablecoin after WLFI freezes user tokens

HTX Delists WLFI and USD1 After UK Sanctions Dispute

Cryptocurrency exchange HTX moved on Friday to delist World Liberty Financial’s USD1 stablecoin and suspend all WLFI trading pairs, escalating a dispute that began when WLFI froze on-chain tokens held in HTX-linked wallets to comply with UK sanctions regulations. The delisting of USD1 is set to take effect on June 7 at 03:00 UTC, with all user USD1 balances converted to USDT at a 1:1 ratio.beincrypto

The Freeze and HTX’s Response

The clash stems from the United Kingdom’s May 26 sanctions package, which designated Huobi Global S.A., the Panama-registered entity behind HTX, under the Russia (Sanctions) (EU Exit) Regulations 2019. The UK government accused HTX of facilitating transactions for entities tied to Russia’s financial sector, including the Kremlin-linked A7 network. Under the sanctions, UK persons and businesses are legally required to freeze assets connected to designated entities.wsj

WLFI, the Trump family-backed crypto venture, responded by freezing WLFI tokens on addresses associated with HTX, citing its compliance obligations under the UK designation. HTX fired back, arguing that the frozen tokens belong to individual users who purchased them lawfully, not to any sanctioned entity or the exchange itself. The exchange said the freeze was implemented “without proper consultation” and formally requested WLFI reinstate access to the tokens.mexc

A Relationship Unraveled

The delisting marks a dramatic reversal for what was once a close partnership. HTX became the first exchange globally to list USD1 when the stablecoin launched in May 2025, and the two firms later partnered on a USD1 loyalty program.cryptonomist

The relationship deteriorated after Justin Sun, the crypto entrepreneur behind HTX, sued World Liberty Financial in April over allegations of crypto-asset improprieties. WLFI countersued in May, accusing Sun of launching a “public smear campaign” against the company. The UK sanctions added a new dimension to the feud, giving WLFI a regulatory basis to act against HTX-linked assets.forbes

What Comes Next

HTX said it will maintain the suspension of WLFI trading until the freeze is resolved and pledged to provide updates to users. WLFI tokens remain secured on-chain, and the exchange said withdrawals would resume once access is restored. The dispute has raised broader concerns about issuer control within the cryptocurrency sector, as token issuers can freeze assets on-chain — a power that critics say undermines the decentralized principles crypto was built on.coinpedia