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Trump’s World Liberty Financial borrowed millions from a protocol its own advisor co-founded
Onchain data shows WLFI deposited 5 billion of its own tokens as collateral to borrow stablecoins it then sent to Coinbase Prime, pushing a lending pool to 100% utilization and leaving depositors unable to withdraw.
Apr 9, 2026, 2:40 p.m.
What to know:
- World Liberty Financial, a Trump family–backed crypto venture, pledged 5 billion WLFI tokens on the Dolomite lending platform to borrow $75 million in stablecoins, draining the protocol’s USD1 pool and sending more than $40 million to Coinbase Prime.
- The WLFI token dropped nearly 10 percent to a record low as the oversized collateral position, nominally valued at about $440 million, left Dolomite exposed to potential bad debt because any forced liquidation would likely crash the thinly traded token’s price.
- The maneuver, involving WLFI using its own governance token to borrow its own USD1 stablecoin from a protocol advised by a World Liberty Financial insider, has sparked concerns about circular economics and the use of user-funded pools to finance a single insider borrower.
Minutes later, 11.45 million USDC moved to a Coinbase Prime deposit address, per Arkham. Two days later, 12.5 million USD1 was sent from the treasury to a separate Coinbase Prime deposit address. Coinbase Prime is typically used for converting crypto to fiat or for institutional OTC trading.
That 12.5 million USD1 was not borrowed from Dolomite. It moved directly from WLFI’s treasury wallet to the exchange, meaning the venture sent its own stablecoin straight to a fiat off-ramp.
But the WLFI token entered the picture twelve days later. On Feb. 20, the treasury deposited 890 million WLFI into Dolomite and borrowed 20 million USD1 against it.
