World Liberty Financial, facing congressional investigation over alleged token sales to entities in sanctioned regions including North Korea, Russia and Iran, said Wednesday it is working to “reallocate user funds and verify users’ identities through KYC checks” after possible breaches.
In an The project is now testing new smart contract logic to protect these accounts.
“Users who have submitted tickets and passed the required checks will have their funds reallocated to new, secure wallets,” World Liberty wrote. “In September, we froze the affected wallets and verified ownership to ensure a smooth transition.”
It is unclear how many users are affected and how much money is at risk in total. World Liberty noted that the issue was “not a WLFI platform or smart contract issue.”
“Even with issues arising from external vulnerabilities, the team prioritized the security of its users while meeting regulatory requirements,” World Liberty added.
Sanctioned sales?
Earlier this week, Senators Elizabeth Warren, D-Mass., and Jack Reed, D-R.I., called on the Justice and Treasury Departments to investigate the alleged sale of WLF tokens to sanctioned entities, citing a September report from Responsible.USaccording to CNBC on Tuesday.
The “suspicious” transactions reportedly involved North Korean hacking group Lazarus, a sanctioned Russian “ruble-backed sanctions evasion tool,” and an Iranian crypto exchange, the watchdog claimed.
It is unclear whether World Liberty’s announcement on Wednesday is related to Warren and Reed’s letter. This isn’t the first time that World Liberty – featuring Eric Trump, Donald Trump Jr. and Barron Trump as co-founders – has raised concerns among members of Congress, who have raised concerns about potential conflicts of interest.
Note that several blockchain security experts, including Taylor Moynahan, security lead at Ethereum’s largest wallet, MetaMask, and Nick Baxfounder of Ump.eth, disputed some of Accountable’s onchain analytics that allegedly connected an address to Lazarus.
“TL/DR: Someone wrote 14 pages about Lazarus based on a funky shitcoin token transfer,” Bax wrote. “The worst part of all this (aside from my senator spreading disinformation) is that not only was Shryder falsely accused of being a North Korean hacker; it appears his large WLFI tokens (~$95k) got frozen as a result of this false positive.”
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