WLFI crashes 13% to all-time lows amid growing liquidation fears for World Liberty Financial

World Liberty Financial’s WLFI token fell sharply on Friday, dropping about 13% over the past 24 hours to new all-time lows of $0.080. The selloff follows online reports and commentary focused on the company’s leverage and collateral use, which have renewed liquidation concerns.

WLFI collateral and borrowing reports

Concerns circulating on social media platform X alleged that World Liberty Financial posted a large amount of WLFI as collateral—reports cited 5 billion WLFI tokens—and took on borrowing of roughly $75 million in stablecoins through decentralized lender Dolomite.

The reports further claimed that more than $40 million associated with the borrowing was sent to Coinbase Prime. Additional commentary suggested that some portion of the debt may already have been partially repaid, while still emphasizing that the overall structure was expected to remain heavily overcollateralized.

World Liberty Financial response

World Liberty Financial responded to the backlash with a statement on Friday. The company said it is one of the largest suppliers and borrowers on WLFI Markets, confirming that WLFI was supplied as collateral and stablecoins were borrowed, but asserting it is “nowhere near liquidation.”

The statement said that even if markets moved dramatically against the company’s position, the response would be to supply more collateral. It argued that this is not treated as a risk in the normal operating model, but rather reflects how the system is designed to work when leverage strategies are used.

Stated strategy and governance plans

World Liberty Financial framed the borrowing position as part of a broader strategy, describing itself as an “anchor borrower” intended to generate yield that, in turn, helps make WLFI Markets attractive to other participants.

For early token holders, the company said it plans a governance process. It stated that a governance proposal to unlock locked tokens will be posted to the forum next week for community input, followed by a formal vote shortly after.

Compliance controls and upgrade claims

World Liberty Financial also said USD1 includes compliance-grade controls, describing enhanced fund safety tools for frozen funds designed for the regulatory environment ahead. It further claimed the upgrade is seamless, with balances, approvals, and integrations carried over intact, adding that there would be no migration and no disruption.

Market reaction and context

Critics’ concerns have centered on liquidation risk tied to leverage and collateral management, while World Liberty Financial characterized the debate as part of a “FUD crowd” framing and said critics are focusing on the wrong aspect of the situation. The company said the project is focused on compounding outcomes over time.