According to data, World Liberty Financial, the cryptocurrency company connected to President Donald Trump’s family, created $25 million in new stablecoins on Monday. This is the same amount that it claimed to have reimbursed to a lending platform last week in response to CoinDesk’s article.
In relation to a roughly $75 million loan it obtained on Dolomite, a small lending platform whose co-founder is a WLFI advisor, the venture announced on Friday that it had paid back $15 million on April 9 and an additional $10 million on April 11.
It generated $25 million on Monday morning, using funds from official custodian BitGo to create its own dollar-pegged stablecoin that it issues and controls. Additionally, it permanently destroyed $3 million worth of USD1, resulting in a net gain in circulation of $22 million.
The matched amounts raise the question of whether WLFI printed new tokens to replenish its treasury after repaying the loan with money it already had or if it produced new tokens expressly to make the repayment.
The action came amid intense controversy that began on April 9 when CoinDesk revealed that WLFI had borrowed stablecoins in exchange for depositing billions of its tokens into Dolomite as collateral.
One of the main opponents of the borrowing was Justin Sun of Tron, a significant supporter of the project, who claimed the team was treating its customers like a “personal ATM” and collecting unauthorised fees. The borrowing infuriated the political and cryptocurrency communities.
WLFI’s borrowing of almost the entire USD1 lending pool left other users, who had deposited their USD1 to earn interest, unable to retrieve their funds.
Following the reporting, WLFI responded in a public discussion on X, referring to the concerns as “FUD” and claiming that it was serving as an “anchor borrower” to generate yield for other users.
If markets went against it, the venture said there was “no liquidation risk” and that it would “simply supply more collateral”. In a public post on the social media site X, World Liberty Financial also threatened to sue Justin Sun.
Source: X.com
According to onchain data, WLFI generated $38.5 million in new USD1 over the last five days in a sequence of significant mints: $12.5 million on April 8, the evening before CoinDesk’s article was published; $8 million on April 10, the day following the first repayment claim; and $18 million on April 12, the day following the second.
The payback schedule is intimately correlated with these minting actions.
Source: X.com
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