HTX Delists WLFI Token and USD1 Financial Product
HTX (formerly Huobi) has officially delisted WLFI-related trading pairs and removed the USD1 financial product, converting users' USD1 holdings to USDT at a 1:1 ratio.
This action stems from the WLFI project's unilateral freezing of assets associated with HTX on the blockchain. HTX stated that these are users' legitimate holdings and not assets of sanctioned entities, and has suspended trading pairs such as WLFI/USDT and USD1/USDT to control risk.
The incident highlights the direct conflict between exchanges and project parties regarding sanction compliance and asset control. HTX prioritizes safeguarding user asset liquidity by converting to USDT.
Source: Public Information
ABAB AI Insight
HTX previously actively supported the WLFI project, being one of the first major exchanges to list WLFI spot trading, and maintained cooperation with projects associated with the Trump family. Previously, Justin Sun's platform has taken strong user protection measures amid compliance controversies, including historical HUSD handling cases.
In terms of capital pathways, HTX reduces potential freezing losses and maintains user trust through rapid delisting and asset conversion, while guiding funds back to core stablecoin pools like USDT, thereby lowering exposure to a single project. The WLFI side, on the other hand, strengthens control over circulating assets through the freezing mechanism, with both parties prioritizing the locking of their own chain resources under sanction pressure.
This is similar to previous cases where exchanges like Binance and Coinbase delisted assets due to regulatory or project disputes, as well as multiple on-chain/compliance frictions between Justin Sun's projects and competitors; currently, HTX is in a defensive phase of strengthening risk isolation and liquidity management under the international sanction environment.
Essentially, this reflects regulatory changes: geopolitical sanctions and the project party's autonomous compliance actions accelerate the power struggle between exchanges and project parties, forcing platforms to restructure asset listing and risk control processes, concentrating pricing power in leading exchanges with strong user protection mechanisms and multi-chain liquidity, while increasing compliance costs squeeze the survival space of small and medium projects.
ABAB News · Cognitive Law
Asset freezing is a double-edged sword: project parties control the chain, exchanges protect users, and trust can vanish in an instant.
Compliance is not a cost but a survival switch: whoever triggers it first resets liquidity rules.
Stablecoins are not stable: the greater the project dependency, the more decisive the exchange's exit, and capital never takes sides.