Key Insights:
- Justin Sun refers to WLFI as a trap door and claims that it has dark blacklisting powers and unfair governance.
- WLFI borrowed approximately $75 million in stablecoins via self-issued tokens, raising concerns about circular financing.
- The token fell by 24% in a month, as liquidity concerns rose.
World Liberty Financial (WLFI), a crypto venture associated with Donald Trump, drew criticism from Tron founder Justin Sun. He accused the team of implementing unnoticed control structures into its token contract. It casts new questions over the safety of investors and claims of decentralization.
Tron’s Justin Sun Fires Allegations at Trump-Backed WLFI
In a statement on X, Justin Sun said his initial support for the project hinged on the promise of financial freedom. He claimed that investors concealed a vital role. “What was never disclosed… is that World Liberty embedded a backdoor blacklisting function in the smart contract,” he wrote.
He further posted that this feature enables the team to “freeze, restrict, and effectively confiscate the property rights of any token holder, without notice.” Sun called the mechanism deceptive by saying:
He also claimed that the project included “illegitimate” governance processes. Justin Sun noted that the votes “were not conducted through a fair or transparent process” and that the results were practically predetermined.
In addition, Justin Sun asserted that he had been struck directly, indicating that his wallet was blacklisted in 2025. “I am the first and single largest victim,” he wrote. Moreover, he linked the restriction to significant financial losses as the token declined in value.
He criticized the project’s overall conduct. Sun alleged that actions to “freeze investor funds without disclosure or due process” took place. He added that moves to “extract fees from users” were never authorized by any genuine community governance.
Inside WLFI’s $75M Borrowing Controversy
accusations made by Justin Sun emerged at a time when WLFI crypto’s financial setup is under increased scrutiny. On-chain data reveals that the project had committed about 5 billion of its own tokens to borrow around $75 million in stablecoins.
Critics believe the model is based on internally issued assets to access external liquidity. Besides, it raises questions about circular financing.
At the beginning of February, WLFI deposited approximately $14 million of its USD1 stablecoin to the Dolomite protocol to borrow $11.4 million in USDC. The team then moved this stash to Coinbase Prime. Yet a few days later, they transferred an additional $12.5 million directly through treasury to Dolomite, bypassing lending channels.
The next few weeks saw an escalation of the activity. According to Arkham Intelligence, WLFI placed almost 2 billion tokens in Dolomite and borrowed more than $31 million in stablecoins.
The project has taken up about 55% of Dolomite’s total protocol liquidity, worth $458.9 million. It has raised concerns around WLFI’s dominance in the Dolomite protocol, as it keeps borrowing. Netizens are questioning the probability of circular financing as Justin Sun’s comments gained traction.
Other token movements have also been called into question. In April, 3 billion WLFI tokens, worth over $260 million, moved into an unknown wallet without any public reason.
The market response has been negative. The WLFI price was below $0.08 at press time. It fell more than 24% over the past month. Meanwhile, the USD1 pool utilization has climbed to about 93%, indicating tight liquidity conditions.
As these concerns escalate, Justin Sun declared, “Unlock the tokens and uphold transparency for the community.” He requested that the team return to what he termed fair and transparent practices.
Source: https://www.thecoinrepublic.com/2026/04/13/justin-sun-tron-funder-accuses-trumps-wlfi-of-illegitimate-practices/
