Justin Sun accuses World Liberty of hiding wallet-freeze tool

Justin Sun accused World Liberty Financial of concealing a blacklist function in its smart contract that allowed the project to freeze investor wallets, including his holding of about $75 million in WLFI tokens. The allegation was posted on X on April 12.

Sun wrote that he invested heavily because he believed World Liberty’s public pitch of broader retail access and decentralized governance. He said the project kept a “trap door” in its contract that allowed the team to freeze or restrict token holders without notice or recourse. Sun says his WLFI wallet was blacklisted when the project launched in 2025 and that he has asked the team to unlock the tokens.

In his post, Sun wrote: “Every action taken by the WLFI team to extract fees from users, to secretly implant backdoor controls over user assets, to freeze investor funds without disclosure or due process, and to 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.” He added that he has been an early supporter of former President Trump’s crypto policies.

Blockchain analytics from Bubblemaps show the continued blacklisting of Sun’s wallet has produced losses of more than $80 million. Sun remains one of the project’s largest known backers after investing at least $75 million in WLFI tokens.

On-chain records indicate the WLFI team posted about $400 million worth of WLFI as collateral and borrowed roughly $150 million in stablecoins through the Dolomite lending protocol, which is linked to an adviser to the venture. That borrowing activity coincided with the WLFI token falling to an all-time low near $0.08.

World Liberty responded that its loan accounts were “nowhere near liquidation” and described the company as an “anchor borrower” in WLFI markets. On April 11 the company said it had repaid $25 million of the loan and that it would publish a governance proposal for a phased unlock for early retail purchasers after community discussion.

At launch, World Liberty flagged Sun’s address and said it suspected the wallet had misappropriated other holders’ funds. Sun disputes that account and frames the blacklist as evidence of centralized control that conflicts with the project’s decentralized branding.

Investors and on-chain observers have raised concerns about the combination of large related-party borrowing, concentrated token holdings and the ability of operators to freeze assets. Those factors have been cited as increasing the risk that a further drop in WLFI’s price could add stress to loan positions and market liquidity.