World Liberty Financial repaid a total of $25 million in USDS over the past two days, even as its token continues to fall amid increased scrutiny of its borrowing strategy.
In a post on X, the project confirmed that it had reimbursed 15 million dollars two days agofollowed by a supplement 10 million dollars today.
Refunds follow backlash over borrowing and liquidity
The move follows growing criticism of WLFI’s activities on its own lending platform, where it has emerged as one of the largest borrowers.
As previously statedthe project deposited billions of WLFI tokens as collateral and borrowed from $75 million in stable parts. The move led to higher loan yields, but also strained liquidity.
The situation sparked concerns among users who were unable to withdraw their funds, with analysts warning of possible bad debts and wider contagion risks if positions were not managed carefully.
WLFI dismissed these concerns, saying it was “far from liquidation” and could add more safeguards if necessary.
Price continues to fall despite refunds
Despite the redemptions, WLFI’s market performance suggests that investor confidence has not yet recovered.
The token is trading near $0.08, down more than 7%extending a broader downtrend marked by lower highs and sustained selling pressure.
Momentum indicators point to weakness. The relative strength index (RSI) has fallen to around 25placing the asset in deeply oversold territory. While this may signal near-term rebound potential, it also reflects the intensity of recent selling.
Notably, WLFI’s decline has come even as the broader crypto market shows signs of stabilization, highlighting a divergence between sentiment for the token and that of the market as a whole.
Market signals unresolved concerns
The lag between WLFI reimbursements and price developments suggests that underlying concerns remain.
While reducing outstanding debt may ease immediate liquidity pressure, it does not fully answer questions regarding the project’s borrowing strategy, reliance on its own token as collateral, and potential risks associated with future releases.
For now, the market is pricing in continued uncertainty rather than viewing refunds as a definitive resolution.
Final summary
- WLFI repaid $25 million in stablecoins following backlash over its borrowing activities, easing some immediate pressure.
- However, the token continues to decline, indicating that broader concerns around risk and liquidity remain unresolved.
