HTX Delists USD1 Stablecoin, Asks World Liberty Financial to Reverse Freeze on Exchange's Addresses

HTX, the crypto exchange associated with Tron founder Justin Sun, has delisted the USD1 stablecoin after he claimed that World Liberty Financial wrongly froze the exchange's addresses. The delisting took effect on Sunday. However, depositing and converting USD1 is no longer possible; users' USD1 will be converted to Tether (USDt) on a 1:1 basis, while the specifics of when and how will be provided elsewhere. It has also suspended trading in the WLFI/USDT, USD1/USDT, BTC/USD1, and ETH/USD1 pairs. 

HTX Calls on World Liberty Financial to Reverse Address Freeze

The exchange stated that its addresses were frozen “without sufficient prior communication, adequate contractual or legal grounds, transparent disclosure, or adherence to due process” and that the decision breached the rights of its users and their assets. The Sun-owned exchange has now called WLFI to reverse the freeze. HTX stated that it would undertake steps in order to protect users' legitimate rights and interests, including but not limited to legal actions.

In a statement by HTX, the company said, “The World Liberty Financial (WLFI) project team recently stated that it has unilaterally imposed a freeze on specific HTX on-chain addresses based on sanctions compliance reviews [...] As a result, the on-chain circulation of certain WLFI assets associated with these addresses has been restricted,” it said, adding it delisted USD1 to safeguard user assets.

HTX, previously known as Huobi Global, was sanctioned last month by the UK's Commonwealth and Development Office (FCDO) because it had "reasonable grounds to suspect" that HTX provided financial services to Russia's government. The main target of this move was the A7 network, which is a group of companies that had claimed to drive around $90 billion (roughly Rs. 8,61,120 crore) into the Russian economy last year using crypto.

It all started in May, when Tron founder Justin Sun was facing a defamation lawsuit filed by World Liberty Financial in Florida; this instance had escalated the legal fight between WLFI and one of its largest investors. The lawsuit, filed in the Eleventh Judicial Circuit Court for Miami-Dade County, accused Sun of making false public statements about World Liberty and violating the terms of the WLFI token sale through alleged prohibited transfers, short selling, and straw purchases. The lawsuit also seeks a court-ordered retraction and compensation from the Tron founder.