World Liberty Financial Faces Backlash As Justin Sun Warns Investors

TLDR

• Justin Sun said WLFI had a hidden function that could freeze investor wallets.
• Sun said his wallet was frozen after moving about $9 million in WLFI tokens.
• WLFI borrowed about $75 million using its own governance tokens as collateral.
• WLFI fell to about $0.07 to $0.08 and hit a new all-time low this week.
• WLFI responded to Sun with a legal threat and said “See you in court pal”.

World Liberty Financial is facing growing backlash after investor Justin Sun accused the project of building secret controls into its token contract. Sun said those controls let insiders freeze wallets and restrict token holders without warning. His comments added pressure on the Trump family-linked crypto venture at a time of falling token prices and fresh scrutiny over its treasury moves.

The dispute widened after on-chain data showed WLFI had borrowed about $75 million in stablecoins against its own governance token. Critics questioned that move, while the project rejected the claims and called them “FUD”.

Justin Sun raises claims over wallet freeze

Sun, the founder of TRON, said he was the “first and single largest victim” of WLFI’s blacklist function. He said his wallet was frozen in September 2025 after he moved about $9 million in WLFI tokens between addresses. Sun later described the project as “a trap masquerading as a door” on X.

Sun invested $30 million in WLFI in late 2024 and later raised his exposure to about $75 million. He was also named as an advisor to the project. According to the claims, about 545 million WLFI tokens in his frozen wallet have since lost more than $80 million in value.

He also challenged a March governance vote on token lock-up periods. Sun said more than 76% of the votes came from just 10 wallets. He argued that the result was fixed before retail holders could have a real say.

Borrowing move adds more pressure on WLFI

Separate from Sun’s accusations, WLFI also faced criticism for using about 5 billion WLFI tokens as collateral on Dolomite. On-chain data showed the project borrowed roughly $75 million in stablecoins, including USDC and USD1. More than $40 million of those funds were later moved to Coinbase Prime.

The borrowing structure drew more attention because Dolomite co-founder Corey Caplan also serves as WLFI’s chief technology officer. Reports said WLFI now makes up around 55% of Dolomite’s total supplied assets. The USD1 lending pool was also running near 93% utilization, raising fresh concerns over available liquidity.

WLFI defended the move and said it acts as an “anchor” borrower in the system. The project also said it was “nowhere near liquidation”. Even so, the borrowing activity became another source of concern for investors already watching the token’s slide.

Token price drops as dispute turns public

WLFI fell to an all-time low of about $0.07 during the week and later traded near $0.08. The token is down more than 21% over the past 30 days. The price drop came as the public dispute between Sun and the project became more intense.

WLFI also threatened legal action after Sun’s public statements. In one response, the project said “See you in court pal”. Sun answered by asking the person behind the account to identify themselves instead of “hiding in the shadows”.

The project said it plans to file a governance proposal for a phased unlock schedule for early retail investors. It added that about 75% of those tokens remain locked. Earlier in April, the team also moved 3 billion WLFI tokens, which brought more attention to its internal activity.

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