• WLFI froze 272 compromised wallets in September to prevent further losses.

• Attackers exploited external vulnerabilities like phishing and malicious Ethereum contracts, not WLFI’s platform.

• On November 19, 2025, WLFI executed a secure on-chain burn of 166.7 million tokens and reissued them to KYC-verified users.

Discover how World Liberty Financial recovered $22.1 million in tokens via burn-and-reissue after a phishing attack. Learn recovery details, USD1 updates, and key takeaways for crypto security. Stay informed on WLFI developments today!

What is World Liberty Financial’s On-Chain Burn-and-Reissue Process?

World Liberty Financial’s on-chain burn-and-reissue process involves destroying compromised tokens and minting equivalents for legitimate owners to restore user funds securely. This method, executed on November 19, 2025, recovered 166.7 million WLFI tokens valued at approximately $22.1 million following a pre-launch security incident. The approach prioritizes verification to prevent further unauthorized access.

How Did Hackers Compromise WLFI Wallets?

The breaches occurred through phishing attacks, exposed seed phrases, and malicious contracts linked to Ethereum’s EIP-7702 implementation during the Pectra upgrade. On-chain analyst Emmett Gallic confirmed that these external vulnerabilities, not flaws in WLFI’s smart contracts, allowed hackers to access a subset of user wallets before the September 2025 launch. WLFI’s team emphasized that rigorous testing of new smart contract logic ensured the recovery was safe and compliant with security standards. According to reports from blockchain security firms like PeckShield, similar incidents highlight the risks of user-side errors in decentralized finance.

WLFI executed an on-chain burn-and-reissue to recover 166.7 million tokens from compromised wallets and reissue them to verified users.

Key Highlights

• WLFI successfully recovered and reallocated approximately $22.1 million worth of its tokens following a pre-launch security incident.
• Hackers accessed wallets through phishing, leaked seed phrases, and malicious Ethereum contracts.
• WLFI is returning tokens to users who completed verification, while wallets of unverified users will remain frozen until done.

World Liberty Financial (WLFI) has recovered and reallocated more than $22 million worth of its tokens after hundreds of user wallets were compromised before the project officially launched in September.

In an announcement on X on November 19, 2025, the project confirmed the security issue did not originate from its own platform or smart contracts. Instead, attackers gained access to user wallets through external security failures, mainly phishing attempts and leaked seed phrases.

The team also noted that some affected wallets were compromised due to malicious contracts tied to complications during Ethereum’s EIP-7702 implementation in the Pectra upgrade.

Frequently Asked Questions

What Steps Must Users Take for WLFI Token Recovery?

Affected users need to complete KYC verification to confirm their identities and provide new wallet addresses. Once verified, WLFI will reissue the burned tokens directly to those addresses. This process, initiated after freezing 272 wallets in September 2025, ensures only legitimate owners regain access, as stated by the WLFI team in their official updates.

How Is WLFI Advancing Its USD1 Stablecoin Product?

WLFI is progressing with its USD1 stablecoin, including expansions like the USD1 Points Program on DeFi platforms such as Dolomite for lending. Additionally, a debit card linked to USD1 and integrated with Apple Pay is set to launch soon via the WLFI app, enhancing usability in everyday transactions while maintaining stability pegged to the U.S. dollar.

Key Takeaways

• Security First Approach: WLFI’s burn-and-reissue demonstrates proactive measures to safeguard user funds amid external threats like phishing.
• Verification Essential: Completing KYC is crucial for token recovery, underscoring the importance of user diligence in crypto security.
• Ongoing Development: Despite the incident, WLFI continues innovating with USD1 integrations, signaling resilience in the DeFi space.

Conclusion

The successful execution of World Liberty Financial’s on-chain burn-and-reissue process not only recovered $22.1 million in compromised WLFI tokens but also reinforced trust in its security protocols. By addressing vulnerabilities from phishing and Ethereum-related issues through rigorous KYC checks, WLFI exemplifies responsible DeFi practices. As the project advances with USD1 stablecoin enhancements and new product features, users can anticipate a more secure and integrated crypto ecosystem ahead—consider verifying your wallet status to stay protected.