World Liberty Financial, the crypto venture linked to President Trump’s family, created $25 million in new stablecoins on Monday, data show, the same amount it said it had repaid to a lending platform last week, according to CoinDesk’s reporting.
The company said Friday it had repaid $15 million on April 9 and another $10 million on April 11 for a roughly $75 million loan it took out on Dolomite, a small lending platform whose co-founder is a WLFI adviser.
On Monday morning, it created $25 million in fresh USD1, its own dollar-pegged stablecoin that it controls and issues, funded through official custodian BitGo. It also permanently destroyed $3 million in existing USD1, for a net increase of $22 million in circulation.
The corresponding amounts raise the question of whether WLFI repaid the loan with money it already had and then printed new tokens to replenish its treasury, or whether it created new tokens specifically to make the repayment?
WLFI did not respond to CoinDesk’s request for comment.
The move comes amid a fierce controversy that started on April 9, when CoinDesk reported that WLFI had deposited billions of its own tokens in Dolomite as collateral and lent stablecoins against them. While the borrowing excited the crypto and political communities, one of the biggest pushbacks came from Tron’s Justin Sun, a major supporter of the project, who said the team was treating its users like a “personal ATM” and extracting illegitimate fees.
The borrowing drained the platform’s USD1 lending pool to nearly 100% utilization, meaning that other users who had deposited their USD1 expecting to earn interest could not withdraw their money because WLFI had borrowed almost all of it.
WLFI responded in a public thread on X after the reporting, calling the concerns “FUD” and saying it acted as an “anchor lender” that generated dividends for other users.
The company said there was “no liquidation risk” and that it would “simply provide more security” if markets moved against it. World Liberty Financial also threatened legal action against Justin Sun in a public post on social media platform X.
The token fell 12% that day and has since fallen further, now trading about 20% below where it was before CoinDesk’s report.
Onchain data shows that WLFI created $38.5 million in fresh USD1 over the past five days in a series of major mints: $12.5 million on April 8, the night before CoinDesk’s story was published; $8 million on April 10, the day after the first repayment claim; and $18 million on April 12, the day after the second.
These redemption activities follow directly with the repayment timeline.
A stablecoin like USD1 is supposed to be backed one-to-one by dollars or dollar equivalents held in reserve. When the issuer creates new tokens, it means that new reserve dollars have entered the system. When it destroys tokens, it must mean that someone has redeemed their tokens for actual dollars. WLFI both creates and controls USD1, meaning it decides when new tokens are created and when old ones are removed.
The $3 million in tokens that were permanently destroyed came from address 0x2ce on the BSC and were routed through a contract that controls USD1’s rules before being sent to a dead-end address. WLFI has not disclosed why these tokens were destroyed instead of being recycled.
Even after the alleged $25 million refund, there is still about $50 million outstanding on the Dolomite position, backed by collateral in a token that has lost about 15% of its value since the story broke.
UPDATE (April 13 at 2:47 p.m.): Updating headline and story throughout to add more context.
