A software developer in the cryptocurrency space is publicly alleging that World Liberty Financial (WLFI), a digital currency project with connections to former U.S. President Donald Trump, has essentially confiscated his assets by refusing to allow him access to his purchased tokens.
In a statement shared on X (formerly Twitter) this past Saturday, Polygon DevRel Bruno Skvorc presented an email communication he received from WLFI’s compliance department. According to Skvorc, the email identified his digital wallet address as “high risk” due to its transaction history on the blockchain, resulting in the project’s decision to withhold his tokens. The social media post included a screenshot of the email.
“In short, they’ve stolen my money,” Skvorc wrote. “And because of the @POTUS [President of the United States] association, there’s seemingly nothing I can do. This feels like modern-day organized crime. There’s no formal complaint process, no avenue for dispute, and no entity to pursue legal action against.”
Responding to a query from another user, Skvorc indicated that he is one of a small group of investors, numbering around six, who were subjected to complete token lockups from the outset. He further stated: “Accepting funds from this address wasn’t deemed ‘high risk’ initially, but releasing rightfully owed money into it suddenly is.”
Are Compliance Systems the Problem?
This incident has ignited criticism surrounding the compliance mechanisms employed by cryptocurrency projects such as WLFI. Prominent on-chain investigator ZachXBT weighed in on the situation, suggesting that automated compliance tools frequently mislabel addresses as “high risk” based on superficial or inaccurate data, such as interaction with decentralized finance (DeFi) protocols or digital currency exchanges.
“I assisted a team with manually auditing addresses for a pre-sale event because widely used compliance software marked them as high risk due to unrelated activities occurring several transactions prior,” ZachXBT commented. “These systems are fundamentally flawed.”
In Skvorc’s particular situation, the flags appear to stem from a historical transaction involving the Tornado Cash cryptocurrency mixer, indirect associations with sanctioned platforms like Garantex and Netex24, and prior engagement with a dashboard that has since been placed on a blacklist.
Skvorc, based in Croatia, is a blockchain specialist with previous involvement in Ethereum 2.0 development. He is also the founder of RMRK, a firm focused on integrating multi-resource NFTs within the expanding metaverse gaming environment.
Related: Major Crypto Investors Accumulate Large Ether Holdings in Market Shift Away From Bitcoin
Justin Sun Experiences WLFI Token Freeze
Earlier in the week, on Friday, Tron’s founder Justin Sun reported a similar issue, stating that his allocation of WLFI tokens had also been subjected to a freeze. His wallet was reportedly blacklisted following the detection of a $9 million transaction by blockchain monitoring services, leading to accusations of potential token sales.
In a statement posted to X, Sun described the freeze as “unjustified” and requested that World Liberty Financial restore access to his tokens. He argued that this action contravenes the fundamental principles of blockchain technology and emphasized that tokens represent “sacred and inviolable” rights.