WLFI rebound opens exit for dormant holders, AI Financial warns

World Liberty Financial’s WLFI token rallied after exchange integrations and a program of token burns, creating liquidity that allowed long-dormant holders to sell large volumes. On-chain analytics show both permanent token destruction and heavy trading activity following the exchange moves.

World Liberty accelerated a supply-reduction campaign and moved its USD1 stablecoin into major exchange infrastructure. On-chain data show the project permanently burned 3 billion WLFI, removing roughly $180.8 million of market value from circulation. A prior governance vote had approved destroying up to 10% of tokens held by founders, team members, advisors and partners, roughly 4.5 billion tokens in total.

The project launched a USD1/BTC trading pair on Binance and listed USD1 on Bybit. Bybit and World Liberty offered a joint rewards program that injected a 45 million WLFI reward pool and offered up to 20% APR for staking and holding the stablecoin.

Blockchain analytics firm Santiment reported that on May 18 market participants sold a net 1.8 billion WLFI tokens for a profit, and the network’s age-consumed metric rose to 17.4 trillion. Santiment linked the spike to the Binance futures collateral integration, saying the new collateral option enabled previously inactive holders to liquidate positions. WLFI traded about 5.5% higher after the selling.

World Liberty also integrated USD1 as collateral across Bybit margin trading, crypto loans, institutional credit lines and pay-later services. The project ties WLFI rewards and staking incentives to USD1 use as part of its effort to revive ecosystem activity after WLFI fell about 88% from its all-time high.

The fallout reached public-company balance sheets. AI Financial, formerly ALT5 Sigma, disclosed in its first-quarter filing that it acquired 7.28 billion WLFI tokens at $0.20 each after a $1.5 billion capital raise in August 2025. For the quarter ended March 28 the company recorded a $348.3 million unrealized mark-to-market loss on that token position, reducing the carrying value to $706.4 million and contributing to a $271.3 million net loss from continuing operations, compared with a $2.4 million net loss a year earlier.

Contractual restrictions limit AI Financial’s ability to use those holdings. Under a Token Purchase Agreement, 3.53 billion tokens are non-transferable for 12 months. Another 3.75 billion tokens are held under a Securities Purchase Agreement and cannot be sold until the company obtains shareholder approval, amends its charter and files an effective resale registration statement. At quarter end the company reported $10.5 million in cash, $32.2 million in total assets and $39.1 million in total liabilities, leaving a $5.5 million working capital deficit. The company filing noted there is “substantial doubt” about its ability to continue as a going concern within one year. In January AI Financial borrowed nearly $15 million from World Liberty and said it could use available cash for share repurchases or to buy additional WLFI tokens.

Governance and legal disputes are ongoing. Crypto entrepreneur Justin Sun alleged that World Liberty developers embedded undisclosed blacklisting functions in the project’s smart contracts that could freeze wallets and limit governance participation. World Liberty dismissed those allegations and countersued, alleging Sun shorted the token and transferred governance-bearing WLFI to Binance to influence the project. On-chain records show the project previously posted 5 billion WLFI as collateral to borrow more than $75 million in USDC.

In a letter to the SEC, Sen. Elizabeth Warren wrote: “WLF’s activities appear to have benefited the Trump family at the expense of investors, who have found themselves facing unanticipated challenges with accessing their tokens. Early investors remain locked out of 80% of their token holdings, unable to sell into a market that has already moved sharply against them.”

Exchange access, incentive programs and supply reductions coincided with higher trading volumes and large token movements. Market participants and regulators continue to track on-chain activity, corporate disclosures and legal filings related to World Liberty and WLFI holdings.