World Liberty Financial minted $25 million in fresh USD1 stablecoins on Monday — the same amount it said it repaid last week to a lending platform — triggering fresh questions about how the firm handled a controversial borrowing spree. What happened - WLFI reported repaying $15 million on April 9 and another $10 million on April 11 against a roughly $75 million loan on Dolomite, a smaller lending venue whose co-founder is an advisor to WLFI. - Onchain records show WLFI created $25 million of new USD1 on Monday, funded via custodian BitGo, and permanently burned $3 million of existing USD1, leaving a net increase of $22 million in circulation. - Over the prior five days WLFI minted $38.5 million in total: $12.5M on April 8 (the night before CoinDesk’s story), $8M on April 10, and $18M on April 12 — mint events that align closely with WLFI’s repayment timeline. Why this matters - The matching amounts raise a key question: did WLFI use existing USD1 tokens it already held to repay Dolomite and then issue new tokens to refill its treasury, or did it mint new tokens specifically to make the repayments? WLFI hasn’t answered requests for comment. - USD1 is issuer-controlled: WLFI mints and destroys the token and claims it’s dollar‑pegged. In normal stablecoin mechanics, minting implies fresh reserves entered the system and burning indicates redemptions into fiat. The firm has not explained why $3 million was burned rather than reused. - The repayment came after reporting that WLFI had deposited billions of its own tokens as collateral on Dolomite and borrowed stablecoins against them. That borrowing pushed Dolomite’s USD1 lending pool to nearly 100% utilization, meaning depositors couldn’t withdraw the USD1 they’d placed to earn interest. Market and community reaction - The story sparked heavy criticism, most prominently from Tron backer Justin Sun, who accused WLFI of treating users like a “personal ATM” and extracting inappropriate fees. WLFI called the concerns “FUD,” described itself as an “anchor borrower” generating yield for users, insisted there was “no liquidation risk,” and said it would add collateral if markets moved against it. WLFI also threatened legal action against Sun on X. - The token dropped about 12% the day the story broke and now trades roughly 20% below its pre-report levels. - Even after WLFI’s claimed $25 million repayment, about $50 million remains outstanding on the Dolomite position, collateralized by a token that has lost roughly 15% of its value since the report. Onchain detail - The $3 million of USD1 that WLFI destroyed originated from address 0x2ce on Binance Smart Chain and moved through the contract that governs USD1 before being sent to a dead-end burn address. WLFI has not disclosed why those tokens were burned. Bottom line WLFI’s recent minting and burning activity tracks tightly with its repayment statements, but the sequence and source of funds remain unclear. The episode underscores transparency concerns when an issuer both controls a stablecoin and uses its own tokens as collateral on lending platforms — a setup that can squeeze liquidity and unsettle users when large, related-party positions are taken. Read more AI-generated news on: undefined/news