Overview
- HTX delisted the USD1 stablecoin and, on Sunday, automatically swapped user USD1 balances to USDT at a 1:1 ratio and credited the proceeds to users' spot accounts.
- World Liberty Financial said it froze blockchain addresses tied to HTX as part of sanctions compliance checks, and HTX has demanded WLFI reverse the freeze and called the action unjustified.
- HTX had already suspended multiple USD1 trading pairs on June 5 before announcing the full delisting on June 7 as the dispute escalated.
- Justin Sun has sued WLFI alleging the project’s contracts contain a hidden freeze backdoor and WLFI has countersued for defamation, with no public settlement reported.
- The episode highlights a governance problem with issuer-controlled freeze features, raises questions about exchange custodial duties and sanctions screening, and could push other platforms to re-evaluate whether to list tokens that can be frozen by their issuers.