HTX has delisted USD1 after World Liberty Financial froze certain exchange-linked on-chain addresses, escalating a dispute that now touches sanctions compliance, user funds, and the limits of stablecoin issuer control. The exchange argued that the freeze was imposed without sufficient prior notice, clear legal or contractual grounds, transparent disclosure, or due process. HTX also demanded that WLFI reverse the freeze and said it may take further action, including legal steps, to protect users’ rights and interests. Delisting And Asset Conversion HTX said USD1 deposits and conversions are no longer supported. User balances held in USD1 will be converted into Tether (USDT) at a 1:1 ratio, with the exact timing and further details to be announced separately. The exchange also suspended several related trading pairs, including WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1. The move comes as HTX faces its own sanctions-related pressure. The UK previously imposed sanctions on Huobi Global S.A., citing reasonable grounds to believe that the entity had provided financial services for the Russian government. HTX has argued that Huobi Global S.A. is a separate legal entity from the HTX online exchange and that the designation should not affect its operations. World Liberty Financial has not issued a detailed public response to HTX’s claims about the address freeze. However, the platform wrote on social media that, given recent sanctions changes, it remains committed to risk-based mechanisms for monitoring sanctions compliance. Why The Stablecoin Freeze Fight Matters The dispute has quickly grown beyond a technical disagreement over frozen addresses. USD1 is a stablecoin linked to World Liberty Financial, a crypto project associated with the Trump family, and the freeze has renewed debate over how much control centralized stablecoin issuers should have over user funds. Centralized stablecoins can include smart-contract functions that allow issuers to freeze or blacklist addresses. In many cases, those functions are used in response to court orders, law enforcement requests, sanctions requirements, or other regulatory concerns. The USD1 case is drawing attention because HTX claims the freeze was based on WLFI’s own sanctions compliance review rather than a direct court order or public government action. That distinction has made the dispute more significant for traders, exchanges, and stablecoin users watching how issuer discretion may be used in practice. Background To The Sun And WLFI Dispute The freeze also lands in the middle of a broader legal fight involving Justin Sun and World Liberty Financial. Sun, who is widely associated with HTX and serves on the exchange’s global advisory board, previously sued World Liberty Financial after claiming the platform froze his tokens and threatened to burn them without proper justification. World Liberty later countersued, accusing Sun of spreading false information about the platform and violating terms tied to the WLFI token sale through alleged unauthorized transfers and market activity. As a result, the conflict between HTX and World Liberty Financial has moved well beyond a single address-freezing incident. It now sits at the center of several major crypto debates at once: sanctions compliance, corporate governance, centralized stablecoin control, and the rights of users when assets can be restricted at the smart-contract level. The key question is no longer only whether WLFI had a compliance reason to freeze the addresses. It is also where the industry should draw the line between legitimate sanctions enforcement and discretionary control over someone else’s assets.
