WLFI says 272 frozen wallets will get assets after KYC checks

The incident exposed seed phrases for what WLFI described as a relatively small subset of users. The company attributed the compromise to third-party security lapses, not flaws in its platform or smart contracts. “This was not a WLFI platform or smart contract issue. Attackers gained access to user wallets through third-party security lapses,” the team posted on X.

WLFI first halted the affected wallets in September while it investigated. In total, 272 wallets were blacklisted, including 215 tied to the phishing attack, and 50 of those wallets reported being compromised. “We stepped in preemptively to stop hackers from draining funds and are working with the rightful owners to secure/move assets,” the project noted in a Sept. 6 post.

Reallocation will proceed for users who have passed identity verification. Accounts that have not completed KYC remain frozen. WLFI did not identify the third party involved, disclose the value of affected assets, or provide a timeline for unfreezing non-verified accounts.

As we covered previously, World Liberty Financial planned to distribute 8.4 million WLFI tokens to participants in its Points Program for USD1 holders through exchanges including Gate.io, KuCoin, LBank, HTX Global, Flipster, and MEXC, with each setting its own schedule. USD1, backed by BitGo, ranked sixth among stablecoins with a $2.98 billion market cap, and at the time WLFI traded around $0.14. The company also outlined real-world asset tokenization and a debit card and mobile app, with the card planned for Q4 2025 and Apple Pay support.