Justin Sun Accuses Trump-Backed WLFI of Hidden Token Backdoor as Price Hits All-Time Low

TLDR

• Justin Sun publicly accused World Liberty Financial of embedding a secret blacklisting function in its smart contract
• Sun claims his own wallet was frozen in September 2025 after moving roughly $9 million in WLFI tokens
• WLFI borrowed around $75 million in stablecoins using its own governance tokens as collateral
• The WLFI token fell to an all-time low of around $0.07–$0.08, down over 21% in 30 days
• WLFI threatened Sun with legal action, saying “See you in court pal”

Tron founder Justin Sun has gone public with serious accusations against World Liberty Financial, the crypto project backed by Donald Trump’s family. Sun says the project secretly built a backdoor into its token smart contract that lets the team freeze, restrict, and take control of any investor’s tokens.

Sun described himself as “the first and single largest victim” of this function. He says his wallet was blacklisted in September 2025 after he moved roughly $9 million worth of WLFI tokens between addresses. At the time, he called the freeze “unreasonable.” Now he is calling it part of a wider pattern of misconduct.

Sun invested $30 million in WLFI in late 2024 and was named as an advisor. He later grew his total position to around $75 million. The roughly 545 million WLFI tokens in his frozen wallet have lost more than $80 million in value since the freeze.

Sun also criticized a March governance vote on token lock-up periods. He said more than 76% of the votes came from just 10 wallets, and that “outcomes were predetermined.” He accused the team of withholding key information from voters.

WLFI’s $75 Million Borrowing Controversy

Separate from Sun’s claims, WLFI has faced backlash over how it handled its treasury. On-chain data shows the project pledged around 5 billion of its own WLFI tokens on Dolomite, a lending protocol, to borrow roughly $75 million in stablecoins including USDC and USD1.

Dolomite’s co-founder Corey Caplan also serves as WLFI’s chief technology officer. WLFI now represents around 55% of Dolomite’s total supplied assets. The USD1 lending pool is running at about 93% utilization, which has raised concerns about available liquidity.

More than $40 million of the borrowed funds were moved to Coinbase Prime. WLFI said it acts as an “anchor” borrower that generates yield and value for the ecosystem. The project called criticism of its borrowing activity “FUD” and said it is “nowhere near liquidation.”

WLFI Threatens Legal Action Against Sun

Sun fired back, asking whoever was running the account to identify themselves by name rather than “hiding in the shadows.”

The WLFI token fell to an all-time low of $0.07 during the week and currently trades at around $0.08. Its market cap sits at roughly $2.5 billion. The project said it plans to file a governance proposal to set a phased unlock schedule for early retail investors, around 75% of whose tokens remain locked.

In April’s first week, the team moved 3 billion WLFI tokens, adding further scrutiny to the project’s activity.

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