Ethereum News Today: Hackers Weaponize Ethereum Upgrade to Target Trump-Linked Crypto Token

Trump-linked crypto token World Liberty Financial (WLFI) has become a focal point of concern following reports that hackers are exploiting a vulnerability tied to Ethereum’s recent Pectra upgrade, draining tokens from compromised wallets via a phishing exploit known as EIP-7702. Security experts, including SlowMist founder Yu Xian, have identified the issue, warning that malicious contracts can be embedded in wallets to siphon funds under the guise of legitimate transactions. CoinGecko data indicate that WLFI’s price dropped from a high of 33.13 cents to 24.27 cents within hours of the exploit being reported [1].

The token, launched by World Liberty Financial on September 1, had initially gained momentum with a 20% tranche of tokens becoming claimable at $0.015 and $0.05 for early buyers. The project, backed by the Trump family and supported by Ethereum-based smart contracts, is linked to a regulated stablecoin, USD1, which is backed by U.S. Treasuries and dollars. This backing aligns with the Genius Stablecoin Act passed in 2025, ensuring compliance with U.S. regulations [2]. Despite this, the ongoing security issue has raised red flags among investors, with some reporting difficulty in rescuing their holdings, with one user managing to move only 20% of their tokens to a new wallet [1].

The vulnerability arises from EIP-7702, a feature introduced in May to allow regular Ethereum wallets to act as smart contract wallets for batch transactions. While designed to improve user experience, it has been weaponized by hackers to route victim funds to external addresses. The attack vector typically begins with phishing sites or links circulating on platforms such as Telegram and X, where private keys are compromised, granting attackers access to victims' assets [1].

The WLFI token is part of a broader ecosystem managed by World Liberty Financial, with the company committing to buy $1.5 billion worth of its own tokens. The token’s performance is also influenced by the success of USD1, a stablecoin whose revenues are used to buy and burn WLFI tokens. As such, the token’s value is not solely dependent on market sentiment but also on the financial health of the associated stablecoin and DeFi services [2].

Despite the security issues, some analysts remain cautiously optimistic about WLFI's potential, with speculation that its value could rise significantly if the ecosystem gains broader adoption. However, the immediate focus for investors is on mitigating risks, particularly phishing scams and wallet vulnerabilities. The broader crypto market, including tokens like Cardano and Solana, is also navigating its own challenges, with Cardano’s recent exclusion from a U.S. blockchain initiative due to high integration costs [3]. This highlights the volatile and interconnected nature of the crypto landscape, where technical and economic factors play equally critical roles in shaping market outcomes.

Source:

[1] Holders of Trump's Crypto Token Targeted by Hackers in Phishing Exploit (https://cryptoadventure.com/holders-of-trumps-crypto-token-targeted-by-hackers-in-phishing-exploit/)

[2] This Trump-Backed Crypto Starts Trading on September 1 (https://finance.yahoo.com/news/trump-backed-crypto-starts-trading-145649571.html)

[3] Cardano Founder Explains Exclusion from US Blockchain (https://holder.io/news/cardano-founder-explains-us-blockchain-exclusion/)