The analysis pointed out unusual spikes in WLFI trading volume and funding rates prior to the selloff but did not allege insider trading. Separately, US Senators Elizabeth Warren and Andy Kim asked the Treasury Department to review a reported $500 million investment by a UAE-backed fund for a 49% stake in WLFI. President Donald Trump said he was not directly involved in the deal and that his sons are handling matters related to the platform. WLFI Drop Raises Questions World Liberty Financial Token (WLFI), a decentralized finance governance token affiliated with the Trump family, may have flashed an early warning signal ahead of the sharp crypto market crash in October of 2025. This is according to a new analysis from crypto data provider Amberdata. The report focuses on trading activity on Oct. 10, when approximately $6.93 billion in leveraged crypto positions were liquidated in less than an hour. During that cascade, Bitcoin plunged about 15% and Ethereum dropped roughly 20% , while several smaller tokens lost as much as 70% of their value. However, Amberdata’s researchers found that WLFI began declining more than five hours before the broader market unraveled. At the time, Bitcoin was still trading close to $121,000 and showed few signs of immediate stress. BTC’s price action over the past 6 months (Source: CoinCodex) Mike Marshall, who authored the report, said the five-hour lead was difficult to dismiss as random noise. According to the analysis, WLFI displayed a series of anomalies before the selloff. Hourly trading volume surged to around $474 million — more than 21 times its typical level — shortly after tariff-related political headlines emerged. At the same time, funding rates on WLFI perpetual futures spiked to roughly 2.87% every eight hours, implying an annualized borrowing cost of about 131%. This is a sign of extreme leverage and positioning imbalance. WLFI price over the past 6 months (Source: CoinCodex) Amberdata does not allege insider trading. Instead, it argues that crypto market structure can amplify stress in certain assets, particularly those with concentrated ownership and heavy leverage. Unlike Bitcoin, which has a widely distributed holder base, WLFI is reportedly concentrated among politically connected participants. Marshall described the pattern as “instrument-specific,” as activity intensified in WLFI first rather than spreading evenly across major cryptocurrencies. The report also shared how leverage mechanics may have transmitted the shock. Many crypto platforms allow traders to post various tokens as collateral. As WLFI’s price dropped sharply, the value of that collateral declined, forcing traders to liquidate more liquid assets like Bitcoin and Ethereum to meet margin requirements. Those forced sales accelerated the broader downturn and triggered more liquidations. Marshall warned that the findings are based on a single event and do not prove WLFI can consistently predict market crashes. Still, he suggested that under-monitored, structurally fragile tokens can sometimes move first during market shocks. Senators Urge Probe of UAE Stake in WLFI Meanwhile, two US senators are urging the Treasury Department to review a reported foreign investment in World Liberty Financial (WLFI), due to concerns over national security, foreign influence and access to Americans’ financial data. In a letter sent Friday to Treasury Secretary Scott Bessent, Massachusetts Senator Elizabeth Warren and New Jersey Senator Andy Kim called for the Committee on Foreign Investment in the United States (CFIUS) to examine a deal in which a United Arab Emirates–backed investment vehicle allegedly agreed to purchase a 49% stake in WLFI for about $500 million. The lawmakers said the transaction reportedly took place just days before Donald Trump’s inauguration and would position the foreign fund as the company’s largest shareholder and only publicly known outside investor. Part of the letter sent to Scott Bessent Warren and Kim asked Bessent, who chairs CFIUS, to confirm whether the committee was notified of the transaction and, if not, to launch what they described as a comprehensive and unbiased investigation. CFIUS is responsible for reviewing foreign investments in US businesses that may pose risks to national security, including cases where foreign entities could gain access to sensitive technologies or personal data belonging to US citizens. According to the letter, the investment was backed by Sheikh Tahnoon bin Zayed Al Nahyan, the UAE’s national security adviser. The senators alleged that the deal directed approximately $187 million to entities linked to the Trump family and granted two board seats to executives associated with G42, a technology company that previously faced scrutiny from US intelligence agencies over alleged ties to China. The lawmakers argued that the structure of the transaction could potentially allow a foreign government to exert influence over a US-based firm that collects and processes sensitive user data. They pointed to WLFI’s privacy disclosures, which indicate the platform gathers information like wallet addresses, IP addresses, device identifiers, approximate location data and certain identity-related records through third-party service providers. Warren and Kim requested responses from the Treasury Department by March 5. President Donald Trump publicly distanced himself from the reported UAE investment. Earlier this month, he said he was not aware of the specifics of the deal and explained that his sons were handling matters related to WLFI.
