Key Takeaways
- A wallet allegedly tied to Trump-backed WLFI sold $8 million in ETH, sparking sell-off fears.
- The wallet offloaded 5,471 ETH at $1,465 each—far below WLFI’s average purchase price.
- WLFI has spent $335 million on crypto assets and is down more than $209 million on its positions.
In a market already on edge, a large-scale Ethereum (ETH) dump by a wallet reportedly tied to World Liberty Financial (WLFI), a Trump family-backed DeFi project, has triggered fresh anxiety across crypto circles.
The transfer comes just as the firm’s bold $335 million crypto play sinks deeper underwater, with over $209 million in unrealized losses.
WLFI Sparks Panic
The alleged WLFI-linked wallet, flagged by on-chain analysts and labeled by blockchain intelligence platform Arkham, sold 5,471 ETH for $8.01 million earlier Tuesday.
The sale, carried out through decentralized exchange CoW Protocol, has raised concerns about whether WLFI is offloading its crypto reserves amid deep portfolio losses.
According to blockchain data, the wallet in question first withdrew the ETH from Aave—where it had been earning yield or used as collateral—before swapping the assets into USDC in three transactions:
- 2,000 ETH → $2.94 million in USDC
- 1,000 ETH → $1.47 million in USDC
- 2,471 ETH → $3.63 million in USDC
WLFI executed the transactions while Ethereum was trading at $1,465—a stark contrast to its reported average buy-in price of $3,259 per ETH.
The project is now sitting on an estimated $125 million loss on its Ethereum position alone. Overall, it has spent $336 million on digital assets and was down more than $209 million across its portfolio at the time of writing.
Wallet Attribution Raises Doubts
Despite the on-chain label from Arkham linking the wallet to WLFI, some crypto analysts are questioning the connection.
An X user pointed out that the wallet lacks multi-sig functionality—a feature common to known WLFI wallets—and noted that it has not interacted with any of WLFI’s core addresses.
“It’s doubtful that this is a WLFI wallet but rather the wallet of someone who did business or interacted with WLFI,” the user wrote. “But of course, 99.999% of people on X will fall for this.”
Without confirmation from WLFI, the sale’s origin remains speculative. However, in a volatile market, perception alone was enough to spook traders, many of whom worry that high-profile liquidations could trigger broader sell-offs.
WLFI did not immediately respond to a request for comment.
WLFI’s Rocky Start
WLFI has been under scrutiny since its launch. Although the project struggled to hit its initial fundraising goal, it later secured the full amount weeks later. It has since expanded its ambitions, including the rollout of its own dollar-pegged stablecoin, USD1.
Still, the project’s investment strategy has drawn criticism. With hundreds of millions deployed into volatile crypto assets—and little transparency on how funds are being managed—the $8 million ETH dump, regardless of its origin, has only deepened skepticism.
Whether the wallet truly belongs to WLFI or not, the timing of the sale and the losses incurred have added fuel to growing doubts about the sustainability of the project and its future in a tightening market.
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