WLFI handles wallet leak incident, federal investigation to be launched soon.

Source: CryptoNewsNet Original Title: Trump’s WLFI Moves To Contain Wallet Breach While Federal Inquiry Looms Original Link:

Wallet Leakage and Countermeasures

World Liberty Financial (WLFI) announced that after a wallet leakage incident occurred before the platform launch, it is reallocating funds and verifying user identities.

WLFI stated on X that the company froze the affected addresses in September and conducted ownership verification before returning the assets to verified users.

According to WLFI, the leak comes from phishing attacks or exposed private keys, rather than vulnerabilities in the WLFI platform or the smart contract itself. The company attributes the issue to a third-party security failure and states that only a “small number” of users were affected—though it did not disclose the specific number of affected accounts or the amount of cryptocurrency involved.

According to on-chain data cited by Arkham analyst Emmett Gallic, WLFI executed an emergency operation to destroy 166.67 million WLFI tokens (worth $22.14 million) from a compromised address and transferred the tokens to a recovery address. This firewall measure appears to be aimed at limiting further losses while the company addresses ownership issues.

Regulatory Scrutiny Intensifies

The timing of the security disclosure has attracted additional attention. According to reports, Senators Elizabeth Warren and Jack Reed have requested the Department of Justice and the Department of the Treasury to review allegations involving the token sales of a major exchange and sanctioned parties.

Their letter referenced a report from the regulatory agency Accountable.US, which linked transactions to the North Korean-associated entity Lazarus Group and an Iranian cryptocurrency exchange. It remains unclear whether the wallet leak is related to the transactions flagged by lawmakers.

Experts question on-chain findings

Security researchers have disputed certain claims made by regulators. Taylor Moynahan from MetaMask and Nick Bax from Ump.eth stated that Accountable.US's analysis misinterpreted certain on-chain activities.

Bax argued that the report incorrectly linked the “Shryder” related wallet to North Korean activities, resulting in approximately $95,000 worth of WLFI tokens being frozen.

WLFI responds by emphasizing user protection and compliance. The company states that it will prioritize freezing vulnerable wallets and verifying legitimate ownership before any transfers. The company also announced that it is testing revised smart contract logic aimed at reducing the likelihood of similar leaks occurring in future launches.