WLFI blacklist freezes Justin Sun-linked wallets, cutting locked token value by $60 million while raising governance and transparency concerns.
The governance token WLFI has returned to focus after a blacklist action impacted holdings linked to Justin Sun. The frozen position lost serious market value in the recent past. Consequently, the case has attracted the spotlight across the crypto markets. Moreover, it reflects an emerging concern of governance authority and investor risk.
WLFI Blacklist Action Erodes Locked Token Value Rapidly
A wallet linked to Justin Sun remains blacklisted by WLFI, according to on-chain analytics platform Bubblemaps. The address can therefore not send or receive WLFI tokens. As a result, the market value of locked holdings declined by almost $60 million in just three months. This decline closely followed more general weakness in WLFI prices.
WLFI had added Sun-linked wallets to its blacklist in September. The action followed an alleged earlier sale of WLFI tokens by Sun. However, the blacklist did not take the step to force the liquidation of frozen tokens. Instead, price decreases led to decreasing notional value of the notional value. Thus, the impact was amplified because of weaker market sentiment.
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Bubblemaps data showed Sun moved about $1 million worth of WLFI to the centralized exchange. He is said to have transferred an estimated 4.9 million tokens to HTX. Meanwhile, he still has control of almost 600 million unlocked WLFI tokens. At today’s prices, those unlocked holdings are valued at close to $135 million.
Sun also became a major investor in Trump-backed crypto initiatives. Reports arrive at his total exposure at about $175 million. This included a $100 million commitment to the TRUMP memecoin. As well, he followed up his strategic commitments by investing around $75 million directly into WLFI.
WLFI is the governance token of World Liberty Financial. The token is trading near $0.1351 as of the current market data. WLFI went public trading on September 1st 2025. First, prices rose dramatically towards $0.46 before stabilizing into a downtrend.
Governance Controls Raise Investor Confidence Questions
World Liberty Financial has promoted itself as a bridge between traditional finance and decentralized finance. The project had a great response in its presale phase. According to disclosures, the presale raised over $550 Million. Therefore, the practices of governance continue to be the keys to sustaining long-term market confidence.
The nature of the Sun’s involvement went beyond financial participation. After becoming the biggest holder of the TRUMP memecoin, he went to a party dinner hosted by Donald Trump. During the event, Sun received the “Trump Golden Torbillon” watch. As a result, his profile when it comes to politically linked crypto projects rose sharply.
Despite his prominence, the WLFI blacklist limited Sun’s operational role. The token contract placed WLFI held at the linked address in a frozen state. As a result, he lost the ability to transfer or receive the said tokens. This restriction brought an extreme level of debate in terms of centralized controls in the decentralized ecosystems.
In September, Sun openly criticized the freeze. He said that he gave him both capital and trust in the future of this project. He also expressed his desire to develop with the team and community. However, he claimed the token freeze was unreasonable and damaging.
“I have contributed not only capital, but my trust,” Sun said at the time. He went on to say that his objective was to create a robust and healthy WLFI ecosystem. Nevertheless, the frozen holdings reduced flexibility in market volatility. Therefore, conflicts between big holders and governance structures continued.
Source: https://www.livebitcoinnews.com/wlfi-blacklist-locks-justin-sun-tokens-as-market-value-slides/
