WLF Races to Safeguard User Funds

Each week, Information Security Media Group compiles cybersecurity incidents involving digital assets. Recently, World Liberty Financial has been working to secure user funds after discovering compromised wallets. In related news, the U.K.’s Serious Fraud Office detained two individuals during a $28 million Basis Markets rug-pull investigation while a hack draining $3.1 million from Gana Payment surfaced. Furthermore, Crypto Dispensers is contemplating a $100 million sale amidst legal troubles involving its CEO.

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World Liberty Financial recently reported that it is reallocating user funds and implementing enhanced know-your-customer (KYC) measures following identified compromises in several wallets linked to phishing attacks and exposed seed phrases. The cryptocurrency platform, associated with high-profile political figures, attributed the breaches to external security failures rather than its own infrastructure. As a precaution, WLF froze affected wallets in September and is currently developing new smart-contract protocols to safeguard user assets.

This situation unfolds amid rising political scrutiny, as Senators Elizabeth Warren and Jack Reed have called for federal investigations into claims that WLF tokens were reportedly sold to sanctioned organizations. These allegations emerged in a September report documenting sales to entities connected to North Korea’s Lazarus Group, a platform for money laundering known as Tornado Cash, and an Iranian cryptocurrency exchange.

WLF has firmly denied these accusations, asserting that it employs rigorous KYC and anti-money laundering practices. The organization claimed to have rejected potential investors who did not meet its stringent standards.

The Serious Fraud Office (SFO) in the U.K. has arrested two men’s suspicion of fraud and money laundering as part of a probe into the alleged $28 million rug-pull involving Basis Markets. Law enforcement executed coordinated raids in south London and Bradford, resulting in the detainment of individuals in their thirties and forties.

The SFO, which is responsible for investigating and prosecuting significant and complex fraud cases, described this investigation as its inaugural major inquiry into cryptocurrency-related fraud. Up to this point, no formal charges have been made.

Basis Markets, launched in late 2021, initially promised a decentralized hedge fund capable of delivering stable yields to retail investors. The founders claimed over 80 years of combined experience and raised approximately $27.7 million through various offerings. However, investigators later discovered that the proceeds were funneled into the personal wallets of the founders, who failed to deliver any product and ceased operations in mid-2022.

A recent hacking incident resulted in a loss of $3.1 million from Gana Payment, as reported by on-chain investigator ZachXBT. The stolen assets were transferred using BNB Smart Chain and Ethereum. According to the investigator, the hacker converted most of these funds into Binance Coin before sending them through Tornado Cash to obscure their origin.

The Gana Payment project, focusing on BEP-20 tokens, operates primarily through decentralized exchanges without significant public documentation or known security audits. Details surrounding the specific vulnerabilities exploited in this attack remain unclear.

In light of ongoing legal challenges, Crypto Dispensers is considering an offer to sell for $100 million just days after federal prosecutors charged its founder and CEO, Firas Isa, with involvement in a $10 million money laundering operation facilitated through the company’s network of crypto ATMs. The company has engaged advisers for a strategic review, emphasizing a shift in its business model since 2020 to focus on software rather than physical machines.

Prosecutors allege that from 2018 to 2025, Isa knowingly processed millions in illicit funds through the ATM network. He faces significant legal repercussions, with a potential 20-year prison sentence if convicted. Isa has pleaded not guilty to all charges.