TLDR
- Tron founder Justin Sun publicly alleges World Liberty Financial inserted an undisclosed blacklist mechanism into its token smart contract
- Sun states his wallet containing approximately $9 million in WLFI was frozen in September 2025 following a token transfer
- The project secured approximately $75 million in stablecoin loans using its native governance tokens as backing
- WLFI token crashed to a record low near $0.07–$0.08, declining more than 21% over the past month
- World Liberty Financial responded to Sun’s allegations with legal threats, stating “See you in court pal”
Justin Sun, the founder of Tron, has leveled explosive accusations against World Liberty Financial, the cryptocurrency venture associated with the Trump family. Sun alleges the project covertly implemented a backdoor mechanism in its token’s smart contract, enabling the team to freeze wallets, impose restrictions, and seize control of investor holdings.
Sun identified himself as “the first and single largest victim” of this alleged feature. According to his account, his wallet was placed on a blacklist in September 2025 following a transfer of approximately $9 million in WLFI tokens across different addresses. While he initially characterized the freeze as “unreasonable,” he now frames it as evidence of broader systemic issues.
“What was never disclosed is that World Liberty embedded a backdoor blacklisting function in the smart contract,” Sun stated on X. He characterized it as “a trap door marketed as an open door.”
Sun committed $30 million to WLFI in late 2024 and received an advisory position. He subsequently expanded his stake to approximately $75 million. The roughly 545 million WLFI tokens locked in his frozen wallet have depreciated by over $80 million since the restriction was imposed.
Sun further challenged a March governance vote concerning token vesting schedules. He claimed that over 76% of voting power originated from merely 10 wallet addresses, suggesting “outcomes were predetermined.” He accused project leadership of concealing critical information from the voting community.
WLFI’s $75 Million Borrowing Controversy
Beyond Sun’s accusations, WLFI has encountered criticism regarding its treasury management practices. Blockchain records reveal the project deposited approximately 5 billion of its native WLFI tokens on Dolomite, a decentralized lending platform, to secure roughly $75 million in stablecoins such as USDC and USD1.
Notably, Dolomite’s co-founder Corey Caplan simultaneously holds the position of chief technology officer at WLFI. The project now accounts for approximately 55% of Dolomite’s total supplied assets. The USD1 lending pool is operating at roughly 93% utilization, prompting liquidity concerns among observers.
Over $40 million of the borrowed capital was transferred to Coinbase Prime. WLFI defended its strategy, characterizing itself as an “anchor” borrower that creates yield and ecosystem value. The project dismissed criticism as “FUD” and emphasized it remains “nowhere near liquidation.”
WLFI Threatens Legal Action Against Sun
Within hours of Sun’s allegations, World Liberty Financial issued a response on X, dismissing his claims as “baseless allegations to cover up his own misconduct.” The account declared: “See you in court pal.”
Sun countered by challenging whoever managed the account to reveal their identity instead of “hiding in the shadows.”
The WLFI token plummeted to a record low of $0.07 this week and currently hovers around $0.08. Its market capitalization stands at approximately $2.5 billion. Project officials announced plans to submit a governance proposal establishing a gradual unlock timeline for early retail participants, approximately 75% of whose tokens remain locked.
During the first week of April, the team transferred 3 billion WLFI tokens, intensifying scrutiny of the project’s operations.
