WLFI Freeze Haunts Justin Sun Three Months After Troubled Token Launch

Tron founder Justin Sun remains blacklisted by World Liberty Financial (WLFI), according to a recent tweet from Bubblemaps.

The blockchain analytics platform said that Sun’s locked WLFI tokens have lost around $60 million in value over the past three months.

WLFI Launch Controversy

Bubblemaps’ latest comment has renewed attention on the controversy that surrounded WLFI’s launch back in September, when the project was hit by confusion, supply disputes, and allegations of insider manipulation that largely affected retail investors. At the center of the dispute was Justin Sun, whose wallets were frozen by WLFI shortly after launch following what the team described as unusual on-chain activity that raised concerns about insider selling.

When WLFI launched, the distribution of tokens immediately became a point of contention. The community allocation was initially expected to be 5%, but only 4% of tokens actually went live because not all users utilized the required lockbox mechanism. At the same time, liquidity and marketing allocations, originally reported at 1.6%, were later clarified to total about 2.8% of supply. This pushed the effective circulating supply closer to 6.8%.

Other large allocations, including a 10% ecosystem fund and a 7.8% tranche reserved for Alt5 Sigma, were unlocked but not subject to vesting. Some analysts said that this created an illusion of available supply that complicated price discovery.

WLFI-Justin Sun Fallout

Sun held roughly 3% of WLFI’s total supply, of which only 20% was unlocked at launch. Sun publicly stated that he would not sell his tokens and said he supported WLFI’s long-term vision. Despite this, WLFI debuted at $0.20 with a market capitalization of about $1 billion, while trading volumes surged into the billions. The token’s price then declined steadily, and on-chain analysts noted that the price movements appeared more mechanical than organic.

According to WeRate co-founder Quinten Francois, part of the volatility may have come from exchanges offloading liquidity allocations, while Sun was allegedly involved in activity linked to HTX, including offering users high yields to deposit WLFI. Blockchain experts reported that around $9 million worth of WLFI was moved early on from addresses linked to Sun through HTX and Binance. Following these transfers, WLFI froze Sun’s wallet using its “guardianSetBlacklistStatus” function.

The freeze sparked debate within the community. Some praised the move as a safeguard against potential repeat behavior. Sun, however, publicly appealed for his tokens to be unfrozen. He called the action unreasonable and said he deserved the same rights as other early investors.

The post WLFI Freeze Haunts Justin Sun Three Months After Troubled Token Launch appeared first on CryptoPotato.