World Liberty Financial Defends Wallet Freeze Decision
The digital currency company and global investor network, World Liberty Financial (WLFI), is currently in the spotlight for its controversial decision to freeze several hundred wallets. This decision has directly affected many, including the founder of Tron, Justin Suns. In response to widespread concern and outcry, WLFI maintains that the decision was designed to safeguard its users from phishing-related compromises and not an attempt to throttle regular trading activities.
Ensuring User Safety
WLFI is steadfastly dedicated to its user community and always takes necessary measures to ensure their security. This is the core reason behind the recent freeze of certain wallets. Responding to the uproar about this decision, WLFI clarifies its intent on a public forum cryptically dubbed as “X”. Stressing on the principle of transparency in operations, the company asserted its role is to protect its users from potential threats, not to hinder their regular activities.
Wallet Blacklists: Breaking Down the Numbers
Earlier this week, WLFI reported that they had blacklisted a total of 272 wallets. A closer scrutiny into this figure showed that nearly 215 of these blacklisted wallets were linked directly to a phishing attack. Another 150 had incurred compromise through support channels. These actions provide clear evidence of WLFI`s proactive stance towards ensuring optimal security for its users.
Justin Sun’s Wallet Freeze and the Intricate Details
Last Friday, WLFI took the bold step of freezing Justin Sun’s WLFI address. This controversial move came following several test transfers that Sun had conducted between his own wallets. These were merely tests following the successful claim of unlocked tokens at launch, and did not involve the actual selling of any tokens. However, data obtained from these outbound transfers led to a false impression that Sun, a prominent investor in WLFI, was offloading his tokens.
Critical Perspective: On-Chain Data Analysis
However, a detailed analysis of the on-chain data indicates a different scenario. According to Alex Svanevik, the founder of Nansen, the sequence of events associated with Sun’s transfers does not tally with the timeline of WLFI’s token decline. Notably, the Nansen data reveals that 50 million WLFIs worth approximately $9.2 million were transferred by Sun on September 4. Intriguingly, this transfer was made three to five hours after the steepest drop in the tokens’ price. Hence, this action was a response to the crash, not the catalyst.
An Off-Chain Fact: The Bottom Line
Further substantiating this view is the on-chain data derived from Nansen, which reported a $12 million WLFI transfer from HTX to Binance by a third-party market maker. While the tokens were transferred using the borrowed capital of HTX as a routine re-balancing strategy, this activity came after the sharpest declines in WLFI and was too minuscule to have significantly affected the market. On a typical day, WLFI’s trading volume exceeds $700 million. Regarding the final destination of the tokens, once deposited on Binance, it is impossible to ascertain whether they were sold or simply held.
Deciphering the Real Cause behind the Crash
According to market participants, the primary reason behind WLFI’s crash is the broader shorting and dumping of WLFI by market makers and trading desks across different exchanges. This view is corroborated by the on-chain records. A prominent transfer from BitGo to Flowdesk, flagged by Nansen, coincided with the beginning of WLFI’s fall. Consequently, this event is considered the decisive factor in explaining the sell-off.
Effects and Ramifications of WLFI’s Freeze Decision
The decision to freeze funds associated with the crash sparked off anxious conversations among whales, market makers, and trading desks. There is apprehension that their tokens might be frozen by WLFI’s decision. A participant encapsulated this fear with the question; if they can freeze Sun’s wallet, who could be next?
Current WLFI Trading Value
Currently, WLFI’s value stands at $0.18. Since its listing, it has witnessed a sharp fall of 40%. Though facing a significant downturn at the moment, WLFI remains steadfast in its commitment to user safety and secure trading practices.
