Justin Sun Accuses Trump Project of Secret Token Freeze, Faces Lawsuit Threat

Tron founder, Justin Sun, has made a series of serious allegations against the Trump family-backed decentralised finance (DeFi) project, World Liberty Financial (WLFI), accusing it of engaging in a large-scale premeditated fraud against investors.

Posting on X on Sunday, Sun alleged the Trump family project had secretly built a “backdoor blacklisting function” into the smart contract used to manage WLFI tokens. According to Sun, this secret function gives the project “unilateral power” to withhold token holders’ assets.

This function gives the Company unilateral power to freeze, restrict, and effectively confiscate the property rights of any token holder, without notice, without cause, and without recourse.

Justin Sun

Sun claimed that he was personally the “first and largest” victim of WLFI’s scam, referring to the September 2025 freezing of his account after he attempted to move approximately US$9 million (AU$12.7m) worth of tokens between two addresses. It’s estimated that Sun’s frozen account holds approximately 545 million WLFI, which declined in value by around US$80 million (AU$114m) since his account was frozen.

Sun said that virtually everything the project had done since its inception had been part of the scam, claiming the project intended from the very start to defraud investors in order to enrich the Trump family and other assorted hangers-on.

“Every action taken by the WLFI team to extract fees from users, to secretly implant backdoor controls over user assets, to freeze investor funds without disclosure or due process, and to treat the crypto community as a personal ATM — all of these actions are illegitimate and were never authorized by any fair, transparent, or good-faith community governance process,” Sun wrote. 

I denounce the ongoing token scandals by the bad actors at WLFI.

Justin Sun

Some though, are skeptical of Sun’s sudden change of heart on WLFI, suggesting the Tron founder knew the project was a scam but chose to invest US$75 million (AU$107m) anyway in an attempt to secure more lenient treatment in his legal fight with the Securities and Exchange Commission (SEC). 

Based on the outcome of that case, in which Sun had been accused of market manipulation, fraud and wash trading, it would appear his investment worked. In a settlement filed March 5, 2026, in a Manhattan federal court, all the charges against Sun were dismissed, with just one of his companies — Rainberry Inc. — being required to pay a modest US$10 million (AU$14m) civil penalty.

Related: Warren, Kim Urge Treasury to Review US$500M UAE Investment in Trump-Linked Crypto Firm

WLFI Responds to Sun’s Accusations

Unsurprisingly, WLFI was quick to respond on X, slinging abuse and accusations at Sun, in what was a war of words between two of the heavyweights of the crypto scamming world.

WLFI’s official account accused the Tron founder of “playing the victim while making baseless allegations to cover up his own misconduct.” And in an apparent reference to Sun’s previous legal dramas, it said Sun was using the “same playbook, different target.” 

The WLFI account also boldly claimed, “We have the contracts. We have the evidence. We have the truth.” In typical Trumpian fashion, the account hit Sun with legal threats, declaring, “see you in court pal.” 

In response, Sun demanded whoever was writing the posts on the official WLFI account identify themselves: “Whoever is hiding behind this official account, step forward and identify yourself…As the largest investor in this project, I demand that those responsible come forward by name, instead of hiding in the shadows.”

Sun’s accusations come during a difficult time for WLFI after it was revealed last week that the project lent 5 billion WLFI tokens to the lending protocol Dolomite in return for around US$75 million (AU$107m) worth of the stablecoins USD1 and USDC. Dolomite was co-founded by Corey Caplan, WLFI’s Chief Technical Officer. 

Related: Trump-Backed American Bitcoin Hits 7,000 BTC as Stock Slides Into Penny Territory

Of the US$75 million in borrowed stablecoins, around US$40 million (AU$57m) have since been sent to Coinbase Prime. This transaction is seen by many as a way WLFI can profit from their tokens without technically selling them. It also sparked fears we may soon see USD1 — WLFI’s stablecoin — de-peg from the US dollar, similar to what we saw happen with TerraLuna in 2022.

According to CoinGecko, WLFI’s token price has fallen over 53% in the past three months as sentiment against US President Donald Trump and concerns around the project have hardened. At the time of writing, the token was changing hands at US$0.079 (AU$0.11), down from just under US$0.17 (AU$0.24) three months ago.

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