- World Liberty Financial, a DeFi project branded under the name of the Trump family, has frozen addresses associated with the HTX exchange, citing compliance with sanctions. Without prior warning.
- HTX responded by removing the USD1 stablecoin from its platform and forcibly converting all users’ balances to rival USDT at a one-to-one rate.
- The background is the British sanctions of May 26 on Huobi Global SA, suspected of handling over USD 1.5 billion in flows linked to Russia.
- The most important thing for you: the stablecoin issuer has a stop button in the code, which can freeze your funds regardless of which exchange you keep them on.
Imagine that you keep your savings in a digital dollar, and one morning the issuer of that dollar freezes your wallet with one click. No warning, no explanation, no deadline for when you will regain access. This is exactly the scenario that played out between two large crypto market players. World Liberty Financial, a project linked to the Trump family, froze addresses belonging to the HTX exchange, and the exchange responded by dumping the USD1 stablecoin and converting customers’ money to another stablecoin. Ordinary users were hit the hardest in this brawl.
Who froze whom and what was going on
USD1 is a stablecoin, i.e. a cryptocurrency whose value is to be rigidly linked to the dollar in a one-to-one relationship. It is issued by World Liberty Financial, the same company behind the WLFI token associated with the Trumps. Around June 5, the company placed a protocol-level freeze on several addresses associated with HTX, citing it as a sanctions compliance review. HTX claims that these addresses contain regular retail client funds, not criminal money, and that it has not received any explanation as to the legal basis or timing of the unfreezing.
The reaction was fierce. The exchange suspended four trading pairs, halted USD1 deposits and withdrawals, and on June 7 at 3 a.m. GMT, it removed the coin from the platform and began automatically converting users’ balances to USDT from Tether at a one-to-one rate.
HTX demanded that the block be lifted and announced legal action. The statement included a sentence that I consider to be the crux of the matter: today WLFI holders are frozen, tomorrow anyone can be. World Liberty did not explicitly confirm that it had frozen HTX addresses, merely saying that it had sanctions compliance checks in place.
British sanctions in the background, or where the spark comes from
The whole brawl has a specific trigger. On May 26, British authorities imposed sanctions on Huobi Global SA, a company registered in Panama related to the HTX brand, suspecting it of handling over USD 1.5 billion in flows supporting the circumvention of sanctions by Russia.
World Liberty treated this decision as a reason to freeze addresses. HTX defends itself with an argument that is important: the sanctioned company Huobi Global SA is not the same as the stock exchange operating today, so the British decision should not affect its clients’ funds. In other words, both sides agree on one thing: sanctions are involved, but what they disagree on is whether they even cover regular users.
This isn’t the first time. Justin Sun and the hidden backdoor question
It’s worth knowing that this is the second time World Liberty has used the same freezing function. The first time it happened in September 2025 was the wallet of Justin Sun, the creator of the Tron network and a figure associated with HTX. Sun later sued World Liberty, alleging that there was a mechanism hidden in the coin contract that allowed the team to lock up investors’ tokens without their consent, and that its assets worth between $300 million and $320 million were frozen with the threat of permanent deletion. World Liberty responded with a defamation lawsuit.
Today’s conflict with HTX is therefore another installment of the war in which private settlements intertwine with the fundamental question of who really controls your coins.
What does this mean for you
This is the most important part, so read carefully. Centralized stablecoins, both USD1, USDT, and USDC, have a blacklist function built into their code. The issuer can freeze or block any address at the level of the contract itself, regardless of which exchange or wallet you hold these tokens.
If you had USD1 in HTX, your funds were already converted to another coin without you asking. It may have worked out without loss of value, but the lesson is hard: when you entrust someone with your money, you also give them the stop button.
For a Polish investor, this is not exotic at all. More and more people are parking their savings in stablecoins, treating them as a convenient, risk-free digital dollar. Meanwhile, a digital dollar from a private company is not cash in your pocket, but a record in the system that someone can withhold. I’m not telling you to run away from stablecoins because they are useful. Keeping everything with one issuer means exposing yourself to its decisions, its disputes and its sanction reviews.
