Lending brought the USD1 pool to 93% utilization, meaning that retail depositors who had lent USD1 to the pool expecting to withdraw as they wished could not do so until the loan was repaid. WLFI redeemed $25M of the position, then earned $25M in fresh USD 1 day later, actively managing the supply of tokens through April. World Liberty Financial did not respond to a request for comment on the report.
World Liberty is also in litigation with crypto tycoon and early buyer of the WLFI governance token Justin Sun, who sued the company, alleging that the company improperly froze his holdings. WLFI countersued for defamation.
Some observers said the business impact of Sunday’s incident was direct.
“Paying fighters in the USD1 stablecoin would be the economic equivalent of writing them a check,” Todd Phillips, a crypto expert at Claros Group, told The Guardian. “Announcing to the world that they’re doing it for USD1, it’s like they’re advertising to the world that USD1 is available and it’s associated with the UFC and the White House.”
The circulating supply of USD1 has increased from $3.3 billion on January 1 to approximately $4.6 billion.
The company has also applied for a banking license from the Office of the Comptroller of the Currency.