World Liberty Financial, a crypto venture linked to Donald Trump’s family, created USD$25 million in new stablecoins on Monday.
The issuance matches the amount it recently said it repaid to a lending platform, according to blockchain data. The company minted the tokens as part of its USD1 stablecoin system, which it fully controls. Additionally, it destroyed USD$3 million in existing tokens, resulting in a net increase of USD$22 million in circulation.
The activity followed repayment claims tied to a roughly USD$75 million loan on Dolomite. The firm said it repaid USD$15 million on April 9 and USD$10 million on April 11. Consequently, the timing of the new issuance closely aligns with those repayments.
The USD1 tokens were minted through BitGo, which acts as the project’s official custodian. Stablecoins like USD1 are typically backed one-to-one with dollar reserves or equivalents. Therefore, new issuance generally signals fresh capital entering the system.
CoinDesk revealed that World Liberty Financial deposited billions of its own tokens as collateral on Dolomite. It then borrowed stablecoins against those holdings.
Meanwhile, critics argued that the strategy strained the platform’s liquidity. The borrowing pushed the USD1 lending pool to nearly full utilization. As a result, other users could not withdraw funds they had deposited to earn yield.
One of the sharpest criticisms came from Justin Sun, founder of Tron. He accused the project of treating users as a funding source while extracting questionable fees. Additionally, he raised concerns about how the platform managed user liquidity.
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Blockchain records show destruction of $3M in tokens
World Liberty Financial rejected those claims in a public response on X. The firm described the criticism as misleading and said it acted as a large borrower to generate returns for others. Furthermore, it insisted that its position carried no liquidation risk.
The company stated it could add more collateral if market conditions shifted. It also threatened legal action against Sun over his comments. However, the dispute intensified scrutiny across both crypto and political communities.
Market reaction followed quickly after the initial report. The associated token dropped 12 per cent on April 9. Subsequently, it declined further and now trades roughly 20 per cent below pre-report levels.
Onchain data shows the firm minted USD$38.5 million in USD1 over five days. It created USD$12.5 million on April 8, USD$8 million on April 10, and USD$18 million on April 12. These issuances closely track the repayment timeline disclosed by the company.
Additionally, blockchain records show the destruction of USD$3 million in tokens from a specific address. The tokens moved through a governing contract before being sent to an irretrievable wallet. However, the company has not explained why it permanently removed those tokens instead of reusing them.
Even after the reported USD$25 million repayment, about USD$50 million remains outstanding on the Dolomite loan. The position is backed by collateral tied to a token that has fallen roughly 15 per cent since the controversy began.
Consequently, the combination of new token issuance, partial repayments, and declining collateral value continues to draw attention. Observers remain focused on how the project manages liquidity, collateral, and user access within its ecosystem.
