Binance lists WLFI token with liquidity concerns as 70 percent insider control sparks debate on decentralisation.
Photo Credit: Unsplash/Mariia Shalabaieva
Binance lists Trump-linked WLFI token, but liquidity concerns spark regulatory debate
Binance is the first major crypto exchange to list World Liberty Financial's governance token - WLFI, allowing trading through WLFI/USDT and WLFI/USDC pairs. Deposits open on Monday, and withdrawals will start a day later. This means that the token is finally transferable after being locked since the launch. The exchange has assigned WLFI a “Seed Tag” status, which requires traders to complete educational quizzes before gaining access. The objective of this strategy is to flag traders about its high risk and early-stage nature.
It's worth noting that there are constraints on liquidity as only a small portion of WLFI's 33 billion supply is currently tradable, with the majority being locked. Analysts warn that this could lead to a restricted market and sharper price swings.
WLFI is the governance token for World Liberty Financial, a Trump-affiliated crypto venture that was pitched as a decentralised financial ecosystem. However, its tokenomics have come under the hammer. As per the reports by CoinLedger and Crypto Potato, insiders own about 70 percent of WLFI's supply, with very little going to the public.
The project is under speculation whether it is more about political branding than financial innovation because the project stands right opposite the principles of decentralisation.
This listing is a landmark milestone for the token, providing access to retail investors globally, but also inviting criticism. The token's high concentration of political figures has led to concerns about governance, transparency, and regulatory risks.
According to analysts, WLFI may face difficulties if regulators perceive it as a financial instrument more closely linked to political power than to commercial usefulness.
Binance's action shows the increasing need for cryptocurrency assets with political connections, as well as the risks they pose to investors. As WLFI is now tradable, the market will demonstrate whether the token can create real demand or if it will continue to be a speculative investment riding on the back of high market volatility and limited supply. This move will set a precedent for politically linked tokens that are entering the mainstream crypto market.
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