World Liberty Financial, the crypto venture linked to President Trump’s family, created $25 million in new stablecoins on Monday, data shows, the same amount it said it had repaid to a lending platform last week following CoinDesk’s reporting.
The venture said on Friday that it had repaid $15 million on April 9 and another $10 million on April 11 toward a roughly $75 million loan it took out on Dolomite, a small lending platform whose co-founder is a WLFI advisor.
On Monday morning, it created $25 million in fresh USD1, its own dollar-pegged stablecoin that it controls and issues, funded through official custodian BitGo. It also permanently destroyed $3 million in existing USD1, for a net increase of $22 million in circulation.
The matching amounts raise the question of whether WLFI repaid the loan with money it already had and then printed new tokens to replenish its treasury, or whether it created new tokens specifically to make the repayment?
WLFI has not responded to CoinDesk’s request for comment.
The move comes amid fierce controversy that started on April 9, when CoinDesk reported that WLFI had deposited billions of its own tokens into Dolomite as collateral and borrowed stablecoins against them. While the borrowing riled up the crypto and political communities, one of the biggest pushback came from Tron’s Justin Sun, a major backer of the project, who said the team was treating its users like a “personal ATM” and extracting illegitimate fees.
The borrowing drained the platform’s USD1 lending pool to a nearly 100% utilization, meaning other users who had deposited their USD1 expecting to earn interest could not withdraw their money because WLFI had borrowed nearly all of it.
WLFI responded in a public thread on X following the reporting, calling the concerns “FUD” and saying it was acting as an “anchor borrower” generating yield for other users.
The venture said there was “no liquidation risk” and that it would “simply supply more collateral” if markets moved against it. World Liberty Financial also threatened legal action against Justin Sun in a public post on the social media platform X.
The token fell 12% that day and has since dropped further, now trading roughly 20% below where it was before CoinDesk’s report.
Onchain data shows WLFI created $38.5 million in fresh USD1 over the past five days in a series of large mints: $12.5 million on April 8, the night before CoinDesk’s story published; $8 million on April 10, the day after the first repayment claim; and $18 million on April 12, the day after the second.
These minting activities track directly with the repayment timeline.
A stablecoin like USD1 is supposed to be backed one-to-one by dollars or dollar equivalents held in reserve. When the issuer creates new tokens, it means that new reserve dollars have entered the system. When it destroys tokens, it is supposed to mean someone redeemed their tokens for actual dollars. WLFI both creates and controls USD1, meaning it decides when new tokens are made and when old ones are removed.
The $3 million in tokens that were permanently destroyed came from address 0x2ce on BSC and were routed through a contract that controls USD1’s rules before being sent to a dead-end address. WLFI has not disclosed why those tokens were destroyed rather than reused.
Even after the claimed $25 million repayment, approximately $50 million remains outstanding on the Dolomite position, backed by collateral in a token that has lost about 15% of its value since the story broke.
UPDATE (April 13, 2:47 pm): Updates headline and story throughout to add more context.