As an early major investor in World Liberty and the current plaintiff in the lawsuit, Sun Yuchen has publicized the drain and reallocate permissions of the USD1 contract and the discrepancies between the GitHub and on-chain code by forwarding the independent technical analysis, directly continuing his legal claims regarding backdoor functions.

In terms of capital pathways, the project added sensitive permissions through an upgradable proxy contract after deployment, shifting resources from publicly promised transparent code to actual control capabilities, motivated by retaining ultimate disposal rights over frozen funds, with specific actions including the introduction of drain/reallocate in the April upgrade without synchronously publishing the source code.

Similar cases can be seen in other stablecoin or token projects that have triggered trust crises due to excessive administrator permissions or code mismatches; the current stablecoin sector is in a phase of applying for banking licenses while undergoing centralized control reviews.

Essentially, this represents a technical substitution: user self-custody is replaced by contract-level administrator permissions, with the mechanism designed to allow forced transfers after freezing, retaining ultimate control in the hands of the issuer, thereby undermining the practical significance of decentralized custody.

ABAB News · Cognitive Laws

The day a set of code is published and another set is deployed, trust has already been overdrawn.
Permissions that cold wallets cannot block are the true contract-level controls.
The backdoor in stablecoins will ultimately determine whether they can become true stable assets.