The cryptocurrency platform World Liberty Financial (WLFI), backed by U.S. President Donald Trump and describing itself as 'community-managed,' faces renewed criticism over its management of user funds.
As recent wallet freezes and the upcoming asset redistribution plan have increased long-standing concerns about central control. Users remain divided on whether WLFI's interventions reflect responsible oversight or indicate deeper governance issues.
WLFI deals with a phishing attack prior to the launch
WLFI recently announced that it will reallocate assets from wallets that were hacked during a phishing attack prior to the launch, affecting the data of a limited number of users.
According to WLFI, the attackers were able to access through external security vulnerabilities, not through vulnerabilities in the platform's infrastructure or smart contracts, and the affected wallets have been frozen since September while investigations are ongoing.
On the other hand, users who have completed the KYC identity verification process will be able to recover their assets, while accounts that have not been verified will remain closed.
WLFI had previously blacklisted 272 wallets linked to the incident, confirming that its intervention prevented further losses while collaborating with those affected.
Community division over wallet freezing and centralization concerns
The response from the cryptocurrency community is still divided regarding the recent WLFI action, as some participants see this step as necessary to protect users after the attack, while others believe that these measures contradict the project's claims about shared governance.
Concerns have also increased after some users on platform X discussed that WLFI's ability to freeze and reallocate assets contradicts a model that is supposed to be community-managed, with critics questioning why these decisions bypass any community voting process.
Notably, traders and developers pointed out several key questions, which are:
The extent of authority that a 'community-managed' project should have over user assets
Should the recovery of funds require an on-chain vote?
The impact of wallet freezing on long-term trust.
Transparency standards when intervening in accounts.
How to handle similar incidents in the future.
Conversely, others defended WLFI, asserting that the platform is taking responsibility instead of shying away from the hack. Supporters argued that the decision to return the assets highlights an industry that often avoids directly addressing security failures, emphasizing that user safety is paramount.
