World Liberty Financial has challenged its largest private investor to a legal fight after he publicly accused the project of embedding a hidden freeze function in its token contract.
The dispute marks a sharp turn in a relationship that began with a $30 million investment in November 2024.
World Liberty Financial Turns on Its Biggest Backer: See You in Court
The investor, Tron founder Justin Sun, poured over $75 million into the platform and describes himself as the first and single largest victim of the project’s blacklisting practice.
In December 2024, the World Liberty Financial cleared its cbBTC portfolio of 102.9 tokens worth $10.4 million to acquire 103.15 WBTC.
The following day, Sun was named an advisor to WLFI, highlighting his growing interest in the DeFi project and the growing relationship between WLFI and WBTC.
Sun’s allegations center on a smart contract function he says was never disclosed to investors. He claims the mechanism grants WLFI unilateral power to freeze or restrict any token holder’s assets without notice or recourse.
His wallet was blacklisted in September 2025 after on-chain data showed outbound token transfers, including one worth $9 million.
Sun’s frozen holdings have since lost roughly $60 million in value as the WLFI token price collapsed, leaving him unable to sell, hedge, or rebalance his exposure. WLFI has maintained the freeze was a security measure, not a targeted action.
The dispute has drawn attention to a separate but related concern. A DeFi analyst flagged that Dolomite, a lending protocol, is allowing $292 million to be borrowed against $400 million in WLFI collateral, with $158 million in USD1 already drawn.
The analyst noted that Dolomite’s founder is also WLFI’s CTO, raising direct conflict-of-interest questions.
WLFI tokens hit a record low of $0.077 on April 11 and traded at $0.079 at press time, down roughly 76% from their all-time high of $0.30 set last September.
The post World Liberty Financial Dares One Of Its Biggest Backers to Court appeared first on BeInCrypto.
Source: https://beincrypto.com/wlfi-biggest-backer-court-blacklist-dispute/
