WLFI Burns $22M in Tokens After Phishing Breach

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• WLFI burned 166.667M compromised tokens worth $22M following phishing-linked wallet breaches.
  
• A pre-designed smart contract mechanism enabled secure token recovery and reallocation.
  
• The event serves as a critical credibility test for the Trump-backed crypto project.

World Liberty Financial has initiated a major emergency response to protect its community, permanently burning 166.667 million WLFI tokens valued at $22.14 million after confirming that several investor wallets were compromised prior to the project’s launch. The move marks one of the most significant security-driven token burns in recent months and highlights the platform’s emphasis on user protection and regulatory alignment.

Compromised Wallets Trigger Emergency Action

According to on-chain data from Arkham analysts, two identical transfers were recorded from the World Liberty Fi Deployer address to the project’s Strategic Reserve, reflecting the size of the burned allocation. The team confirmed that the affected wallets had been infiltrated through phishing attacks or leaked seed phrases—issues stemming from external security lapses rather than flaws in WLFI’s own infrastructure.

World Liberty Fi executed an emergency function burning 166.667M $WLFI ($22.14M) from compromised address, reallocating to a recovery address.

Function designed for two scenarios:
An investor loses wallet access before vesting OR malicious account acquires WLFI via exploit pic.twitter.com/VSUDWhDPCR

— Emmett Gallic (@emmettgallic) November 19, 2025

World Liberty Financial had already frozen the impacted wallets in September, preventing further unauthorized movement while it prepared a long-term recovery solution.

Smart Contract Function Enables Secure Token Reallocation

The platform’s emergency response was made possible through a burn-and-reallocate function that was pre-built into the WLFI token architecture. Designed for scenarios where investors lose access to their wallets or malicious actors obtain tokens through exploits, the mechanism allows the deployer to invalidate compromised holdings and redirect them to verified recovery wallets.

The team noted that this logic underwent months of internal testing before execution. By prioritizing compliance and user safety, WLFI aimed to avoid rushed fixes and ensure that all reallocations met strict regulatory and security requirements.

A Critical Credibility Test for a High-Profile Project

World Liberty Financial—backed by members of the Trump family—launched its governance token earlier this year amid heightened scrutiny over its tokenomics and regulatory positioning. The latest incident, while external in origin, presented a pivotal test of the project’s operational integrity.

Also Read: Trump Family’s World Liberty Financial Burns 47 Million Tokens as WLFI Price Plummets

The successful burn and reallocation process is now being positioned as evidence of WLFI’s preparedness for crisis scenarios and its commitment to safeguarding investor assets.

With the emergency burn complete and recovery wallets secured, WLFI is aiming to restore confidence across its ecosystem. The event underscores both the rising sophistication of phishing campaigns and the growing importance of proactive smart contract design in protecting user funds.

Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.