WLFI's High-Stakes Buyback: Can It Weather Regulatory and Market Storms?

World Liberty Financial (WLFI), the Trump family's cryptocurrency project, has executed a significant token buyback in recent hours, spending $7.79 million to acquire 46.56 million WLFI tokens at an average price of $0.1674, according to on-chain data from LookonChain and multiple crypto news platforms. This move comes amid heightened regulatory scrutiny and market volatility, as the project navigates a series of challenges, including an SEC investigation into its reserve firm and a recent phishing attack that led to a major token burn.

The buyback, which occurred over a five-hour period, marks a strategic effort to stabilize the token's price and restore investor confidence. WLFI's strategic reserve address alone spent $5.54 million to repurchase 32.93 million tokens. The purchases were facilitated using USD1, WLFI's stablecoin pegged to the U.S. dollar, signaling internal confidence in the project's long-term viability. Analysts note that such buybacks are common in the crypto space, as they reduce circulating supply and can create upward pressure on prices if demand remains steady.

The timing of the buyback is critical, given the broader context of regulatory and market headwinds.

ALT5 Sigma, WLFI's reserve firm, is under investigation for potential violations of SEC disclosure rules, including discrepancies in the timing of executive suspensions and a lack of transparency around a $1.5 billion WLFI token purchase in August, with over $500 million reportedly flowing to entities linked to Donald Trump. Meanwhile, Trump's net worth has dropped $1.1 billion since September, partly due to the declining value of TMTG, his social media and crypto company, and the broader slump in WLFI's price, which has fallen from $0.31 at its September debut to $0.158.

Compounding these challenges, WLFI recently disclosed a phishing attack that compromised user wallets, leading to an emergency token burn of 166.7 million tokens ($22 million) and a redistribution of funds to verified accounts. The project's treasury, which holds over $860 million in assets, has now allocated $11 million for a TWAP buyback strategy on CowSwap, with $1.2 million already deployed. On-chain activity suggests continued accumulation by major holders, including a whale who spent $25 million in USD1 to buy 165.79 million WLFI tokens over three days.

Market reactions to the buyback have been mixed. While WLFI surged 6% to $0.1640 amid the purchases, the broader crypto market remains under pressure, with Bitcoin and Ethereum trading below $88,000 and $2,967, respectively. Analysts like Mayank Dudeja highlight that WLFI must hold above $0.1450 to maintain its bullish trajectory, with potential targets at $0.25 if key resistance levels are cleared. However, a drop below $0.1400 could trigger a retest of support at $0.1250.

The buyback also underscores WLFI's dual identity as both a DeFi protocol and a politically charged meme token. Recent moves, such as investing in the SPSC meme coin, reflect efforts to blend utility with community-driven hype. Despite these efforts, the project faces an uphill battle to recover from regulatory scrutiny, security breaches, and broader market skepticism.