HTX has suspended trading for WLFI and USD1 pairs after accusing World Liberty Financial of freezing specific exchange-linked on-chain addresses without enough transparency or prior coordination.
The exchange halted WLFI/USDT, USD1/USDT, BTC/USD1 and ETH/USD1 trading as of 13:00 UTC on June 5, 2026. The move followed what HTX described as a unilateral freeze imposed by the WLFI project team after sanctions-compliance reviews, restricting the on-chain circulation of WLFI assets associated with certain HTX addresses.
HTX also pointed to the USD1 stablecoin’s connection to the same issuer. Since USD1 is issued by the WLFI project team, the exchange said it suspended USD1 trading pairs to protect users, preserve market fairness and reduce potential systemic risk.
The dispute puts exchange custody, issuer control and stablecoin market access into the same story. WLFI is tradable after a governance vote, while USD1 is marketed as a U.S. dollar stablecoin designed for institutions and individuals. The freeze shows how much power an issuer or project team may still retain over assets that trade across centralized exchanges and on-chain venues.
User Balances Remain Visible
HTX said users’ WLFI balances remain displayed inside their exchange accounts. The exchange also said all USD1 currently held by users will be converted into USDT on a uniform basis, with the equivalent amounts credited to user accounts. More details on that conversion are expected separately.
That conversion is important because USD1 is meant to function as a dollar stablecoin. When an exchange moves to convert user balances into USDT, the issue moves beyond a single frozen WLFI asset and becomes a stablecoin access problem for users who may have been holding USD1 as settlement liquidity.
HTX also clarified that Huobi Global S.A. is separate from the online HTX exchange and said any designation involving that listed entity should not affect HTX’s online platform. The exchange said its global operations remain unaffected and user funds are safe.
The language shows HTX trying to separate three issues at once: sanctions-linked address screening, WLFI issuer controls and confidence in the exchange’s own user balances.
WLFI Control Powers Face Fresh Scrutiny
HTX’s strongest criticism centers on process. The exchange said WLFI’s freeze was carried out without enough prior communication, legal or contractual basis, transparent disclosure or due process. HTX also called on the WLFI team to clarify the basis for the freeze, the scope of control and the parties responsible, while asking for affected user assets to be unfrozen.
The dispute arrives after months of scrutiny around WLFI, USD1 and project-level controls. A previous WLFI freeze dispute involving Justin Sun already raised questions about investor access, transfer restrictions and issuer authority. More recent pressure around USD1 also intensified after World Liberty Financial’s Dolomite position put the project’s stablecoin, collateral and liquidity design under closer market review.
The latest HTX action adds an exchange-level dimension. If a project team can restrict exchange-linked addresses after compliance reviews, then users are exposed not only to exchange risk but also to issuer-level control risk. That is especially sensitive for a stablecoin product because traders use stablecoins as settlement assets, collateral, liquidity reserves and trading-pair bases.
Stablecoin Listings Now Carry Issuer Risk
HTX was one of the earliest major exchanges to support USD1, giving the stablecoin a major offshore liquidity channel after launch. That early support made the trading halt more significant because the same exchange that helped expand USD1 access is now converting user holdings into USDT.
The case also lands during a broader due-diligence cycle for WLFI. USD1’s partner network has already drawn attention after WLFI’s AB Chain relationship became part of a wider sanctions-linked scrutiny story. The HTX freeze dispute now shifts the focus from partner vetting to operational control over token circulation.
For users, the immediate issue is access to balances and conversion timing. For exchanges, the issue is whether listed assets can be affected by issuer-side freezes after trading begins. For stablecoin markets, the issue is whether compliance controls can be applied without damaging liquidity, fairness and user confidence.
HTX says it will continue seeking accountability from WLFI and may pursue legal remedies. The next update will likely center on the USD1-to-USDT conversion process, whether WLFI provides a public explanation for the frozen addresses, and whether the affected WLFI assets are restored or remain restricted on-chain.
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