TLDR
- Justin Sun said World Liberty Financial froze his WLFI holdings and blacklisted his wallet.
- Sun said he controls about 4% of WLFI voting power but cannot join the vote.
- WLFI proposed new terms for 62.28 billion locked tokens.
- The plan includes a 10% burn of up to 4.52 billion WLFI from insider-linked tokens.
- WLFI said holders who do not opt in to the new schedule will remain locked indefinitely.
Justin Sun, the largest publicly known investor in Donald Trump’s crypto venture World Liberty Financial, has accused the company of freezing his holdings and using a hidden blacklisting function in the WLFI token contract. In posts published on X, Sun said the platform had embedded what he described as a “backdoor blacklisting function” that allowed the company to freeze, restrict, or block token holders without notice. Reuters reported that it could not independently verify whether such a tool exists or whether it was used in the way Sun described.
This Is World Tyranny, Not World Liberty Financial — Here's Why
This proposal has been packaged as a "governance alignment signal" and a "long-term commitment," but strip away the packaging and what you have is one of the most absurd governance scams I have ever seen. Let me… https://t.co/sJhFMnLWsJ
— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) April 15, 2026
Sun said he was the “first and single largest victim” of the alleged control mechanism and claimed his holdings were frozen in September. He later wrote that on-chain records showed his digital wallet had been blacklisted by a single account with special administrative authority. However, he did not publish those records. Sun also said he controls about 4% of WLFI voting power but has been excluded from the current governance process because his tokens remain frozen.
World Liberty Financial responded through its official X account, writing,
“We have the contracts. We have the evidence. We have the truth. See you in court pal.”
A spokesperson for the company referred reporters to those public posts. Sun did not provide additional comment beyond his X statements.
Governance Proposal Adds New Dispute
The dispute surfaced as World Liberty Financial published a governance proposal covering about 62.28 billion WLFI tokens. Under the proposal, 45.24 billion locked tokens held by founders, team members, advisors, institutions, and partners would move to a two-year cliff and a three-year linear vesting schedule if holders opt in.
That group would also accept a 10% burn, removing up to 4.52 billion WLFI from supply. Another 17.04 billion early supporter tokens would move to a two-year cliff and a two-year vesting schedule with no burn.
We’ve just posted a governance proposal to the forum for community discussion, and we believe it represents one of the strongest long-term governance alignment signals in DeFi.
Here's what it does 🧵
— WLFI (@worldlibertyfi) April 15, 2026
World Liberty Financial said holders who do not affirmatively accept the new terms would remain locked indefinitely under the current structure. The company presented the proposal as a governance alignment measure and said the affected tokens would remain committed to governance participation for at least two years. In posts on X, the company described the proposal as one of the strongest long-term governance signals in decentralized finance.
Sun Says Vote Structure Punishes Dissent
Sun sharply criticized that framework and said the proposal was coercive because holders who oppose it face indefinite lockups. He argued that the vote cannot be treated as valid if some token holders are frozen out of participation while others are allowed to vote.
He also said actual control over the WLFI smart contract rests with an anonymous 3-of-5 multisig and an anonymous guardian wallet that can blacklist addresses.
In his posts, Sun said the governance structure allows a small group of unidentified actors to override token-holder decisions at the contract level. He also criticized the project’s compliance requirements, saying ordinary voters must identify themselves while those controlling the contract remain anonymous. His posts framed the proposal as a dispute over property rights, governance access, and administrative control.
Company Disclosures and Broader Context
World Liberty Financial’s risk disclosures state that the company can block and freeze wallet addresses and associated tokens that it determines are linked to illegality or activity that violates its terms. Similar controls exist in some other crypto projects, including stablecoin issuers that freeze tokens in response to law enforcement requests or internal compliance reviews.
Sun became one of World Liberty Financial’s most visible backers in late 2024 and later said he had increased his holdings to at least $75 million in WLFI tokens. In March, the US Securities and Exchange Commission settled a 2023 lawsuit against Sun for $10 million. The case had alleged fraud, the sale of unregistered securities, and concealed payments to celebrities to promote crypto products. Sun made no admission of wrongdoing in that settlement.
The latest dispute now places World Liberty Financial’s governance model under renewed scrutiny as the company seeks community support for a large token vesting and burn overhaul.
