HTX, the crypto exchange associated with entrepreneur Justin Sun, has removed support for the USD1 stablecoin issued by World Liberty Financial (WLFI), escalating a dispute that now spans compliance actions, frozen blockchain addresses, and ongoing legal claims between both sides.
The exchange confirmed that USD1 trading and deposits were suspended after it alleged that WLFI unilaterally froze HTX-linked on-chain addresses. HTX described the decision as a response to what it called a lack of communication and legal grounding from WLFI, and cited user protection as the main reason behind the delisting.
Official Statement from HTX Regarding the Handling of WLFI and USD1 Assets
— HTX (@HTX_Global) June 6, 2026
The World Liberty Financial (WLFI) project team recently stated that it has unilaterally imposed a freeze on specific HTX on-chain addresses based on sanctions compliance reviews.
As a result, the…
Delisting and conversion plan set for user holdings
In its official announcement dated June 6, HTX stated that USD1 would be delisted at 03:00 UTC on June 7, 2026. The exchange confirmed that all eligible USD1 balances would be converted into Tether (USDT) at a 1:1 ratio.
HTX outlined that the converted USDT would be credited directly to users’ spot accounts. The exchange also noted that the exact completion timeline and distribution details would be released separately after processing.
The platform suspended deposits and conversion services for USD1 immediately following the announcement. It also halted multiple trading pairs involving the stablecoin, including WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1.
HTX framed the move as a safeguard for user funds during what it described as an active dispute affecting on-chain liquidity.
Dispute centers on frozen on-chain addresses
HTX stated that WLFI imposed restrictions on specific blockchain addresses linked to the exchange under sanctions compliance reviews. The exchange argued that the action was taken without adequate consultation or transparent disclosure.
“The World Liberty Financial (WLFI) project team recently stated that it has unilaterally imposed a freeze on specific HTX on-chain addresses based on sanctions compliance reviews,” HTX said.
The exchange added that the restrictions affected circulation of WLFI-related assets tied to those addresses and limited normal asset movement. HTX said the lack of due process created risks for users whose funds were exposed to the impacted wallets.
HTX also called on WLFI to reverse the freeze and restore access. The exchange indicated that it may pursue legal remedies if the situation remains unresolved, stating that it would act to protect user rights and assets.
Sanctions pressure adds context to dispute
The dispute comes shortly after regulatory pressure increased around entities linked to HTX. In May, the UK placed Huobi Global S.A., an entity connected to the exchange’s earlier structure, on a sanctions list. Authorities cited “reasonable grounds to suspect” involvement in providing financial services that could support Russia’s government.
HTX rejected the implication that the designation applies to its current platform. The exchange said that Huobi Global S.A. is a separate legal entity from the operational HTX exchange and argued that the sanctions should not affect current users or services.
WLFI, meanwhile, referenced sanctions compliance controls in its public communication following the freeze. The platform stated on X that it maintains “risk-based sanctions compliance controls” in response to recent updates in sanctions policy.
World Liberty Financial has not publicly confirmed whether it directly initiated the freeze on HTX-linked addresses.
Legal tensions between HTX and WLFI deepen
The USD1 delisting adds another layer to a broader legal conflict between HTX adviser Justin Sun and World Liberty Financial. The dispute has already produced competing lawsuits and allegations from both sides.
Sun filed a lawsuit in April against WLFI, claiming that the platform froze his tokens without justification and threatened to burn them. WLFI responded in May with a defamation suit, accusing Sun of making false claims and violating token sale terms through alleged prohibited transfers, short-selling, and straw purchasing activity.
The latest exchange-level dispute now intersects with that personal legal conflict, expanding the scope of disagreement from individual token holdings to platform infrastructure and stablecoin operations.
Market access shifts as USD1 exits HTX
With USD1 removed from HTX, users holding the stablecoin face automatic conversion into USDT at parity. This structure prevents immediate losses linked to the delisting but also removes direct exposure to WLFI’s stablecoin ecosystem on the exchange.
The suspension of trading pairs such as BTC/USD1 and ETH/USD1 also reduces liquidity channels previously tied to USD1 markets on HTX. The exchange has not announced a timeline for restoring any WLFI-related pairs.
HTX maintains that its actions reflect a precautionary response to external restrictions on blockchain addresses. WLFI has not issued a detailed public rebuttal addressing the delisting decision at the time of publication.
Ongoing uncertainty around compliance and control
The dispute highlights how compliance actions on-chain can create immediate operational consequences for centralized exchanges. In this case, a freeze on blockchain addresses triggered a full delisting of a stablecoin and forced automatic asset conversion for users.
HTX has positioned the move as a protective measure for users. WLFI’s compliance stance suggests the freeze formed part of broader risk controls linked to sanctions developments.
As both sides maintain opposing interpretations of the freeze and its justification, the situation continues to develop across legal, operational, and regulatory dimensions.
Roman Zaika
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