Sun has focused on two major issues with the project. The first is a backdoor blacklisting function built into the WLFI smart contract that lets the team freeze any holder’s tokens without any notice or explanation. The second is an approximately $75 million loan that the project’s treasury recently took out by pledging approximately five billion WLFI governance tokens as collateral on its affiliated DeFi platform Dolomite. Borrowing system has become direct Comparison of the way Alameda Research borrowed against FTX’s proprietary FTT token Before the collapse and eventual bankruptcy of the exchange.
I have always been a strong supporter of President Trump and his crypto friendly policy.
As an early backer who invested heavily in World Liberty Financial, I did so because I believed in the vision that was presented to the public: a decentralized finance platform that…
– His Excellency Justin Sun 👨🚀 🌞 (@justinsuntron) 12 April 2026
Sun has called himself World Liberty Financial’s “first and greatest victim.” project in September last year blacklisted He transferred approximately $545 million of his WLFI tokens after transferring approximately $9 million worth amid heavy selling pressure. In those days, Sun posted publicly on XInsisted that he was innocent and demanded release of the token. In response, World Liberty Financial posted on“We do not seek to blacklist anyone. We respond when alerted to malicious or high-risk activity that could harm community members.”
“I condemn the ongoing token scams by bad actors at WLFI… Every action taken by the WLFI team to extort fees from users, secretly establish backdoor controls on user assets, freeze investors’ funds without disclosure or due process, and treat the crypto community as a personal ATM – all of these actions are illegitimate and were never authorized by any fair, transparent or good faith community governance process,” Sun wrote.
World Liberty Financial has ridiculed Sun and refuted his claims on X. “Does anyone still believe @justinsuntron?”. asked his ex account. “We have contracts. We have evidence. We have the truth. See you in court, buddy.”
does anyone still believe @justinsuntron ?
Justin’s favorite move is to play the victim by making baseless accusations to cover up his misconduct.
Same playbook, different goals. WLFI is not the first.
We have contracts. We have evidence. We have the truth.
Look…
– WLFI (@worldliberty) 12 April 2026
Specifically, the previous allegations against Sun and his companies were decided last month. In the long-running SEC case he was accused of laundering-trading TRX tokens and offering unregistered securities, among other charges. In the end, Rainberry, one of Sun’s entities, paid a $10 million fine without admitting wrongdoing. Democrats on the House Financial Services Committee The absence of a conviction was previously highlighted in a letter to the SECLinking this to notions of pay-to-play as Sun had invested at least $75 million in Trump-related projects. Since the settlement of the case, Sun has now taken a more defiant and adversarial public stance against World Liberty Financial.
Of course, Sun is not the only prominent figure involved in this controversy. Binance, under former CEO Changpeng Zhao (CZ), has about $2 billion in World Liberty Financial’s USD1 stablecoin, which is expected to generate millions in annual revenue for the Trump-affiliated project. Trump pardoned CZ Following his short prison term for anti-money laundering failures at Binance. In contrast, the two developers behind the Samurai Wallet bitcoin privacy app are in prison serving multi-year sentences. For comparable allegations involving a money laundering facility.
The company is also linked to UAE National Security Advisor Sheikh Tahnoun bin Zayed Al Nahyan $500 million pledged to World Liberty Financial days before Trump’s inaugurationTaking a 49% stake and sending $187 million to Trump family entities. Months later, the UAE won approval to buy hundreds of thousands of banned Nvidia AI chips for Sheikh Tahnoun’s G42 company.
The wave of alleged improprieties and potential conflicts of interest surrounding the Trump administration’s crypto dealings has likely slowed the pro-Bitcoin tailwind anticipated by many in the industry. According to a report, Trump-linked enterprises to invest nearly $1.4 billion in 2025Much of it is driven by memecoins, stablecoins, and tokenization rather than Bitcoin.
The Trump administration still has an opportunity to make nice with Bitcoin purists by finalizing regulatory clarity through the Clarity Act. However, policy groups such as coin center and this Bitcoin Policy Institute Warned that developer protections in the Clarity Act should not be removed before the bill is voted on, as this would expose builders to legal risk and potentially push this activity overseas.
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