Justin Sun has accused World Liberty Monetary, or WLFI, of hiding controls that would freeze token holders’ wallets.
Abstract
- Justin Sun mentioned WLFI hid blacklist controls that would freeze wallets with out discover or recourse.
- Onchain information tied the challenge to massive token-backed borrowing that drew recent criticism from observers.
- WLFI confronted added stress as token costs fell and liquidity considerations deepened throughout controversy once more.
The claims add new stress to the challenge as onchain exercise, borrowing patterns, and token losses draw extra consideration.
Sun mentioned he backed WLFI as a result of it offered itself as a decentralized finance platform constructed to broaden monetary entry. He wrote that the challenge later revealed a really completely different construction, one which gave the corporate direct management over token holders’ entry.
In his assertion, Sun claimed the WLFI good contract contained a “backdoor blacklisting function.” He mentioned that function might let the corporate “freeze, restrict, and effectively confiscate” belongings with out discover or recourse. No response from WLFI was included within the materials supplied.
Sun mentioned he was “the first and single largest victim” of the alleged blacklist system. He claimed WLFI blocked his pockets in 2025 and mentioned the motion violated investor rights and fundamental blockchain requirements tied to equity and transparency.
He additionally challenged the challenge’s governance course of. Sun mentioned votes used to help these actions weren’t truthful or clear. He argued that key details had been withheld from voters and that participation was restricted earlier than outcomes had been determined.
Furthermore, the dispute comes as WLFI additionally faces questions over its use of self-issued belongings in lending exercise. The challenge dedicated massive quantities of its personal tokens and stablecoin to safe exterior liquidity.
Blockchain information cited within the report confirmed that WLFI used round $14 million in USD1 to borrow about $11.4 million in USDC in February. Different reported transfers and deposits later pushed whole borrowing above $75 million, whereas the challenge’s presence on Dolomite grew to a big share of the protocol’s liquidity.
Worth stress provides to the dispute
Market information in the identical report confirmed WLFI falling greater than 21% over the previous 30 days. The token traded beneath $0.08 because the accusations circulated and as considerations round liquidity use and withdrawals stayed in focus.
The report additionally mentioned USD1 pool utilization neared 93% and that WLFI moved 3 billion tokens in early April. Sun mentioned the challenge ought to “unlock the tokens and uphold transparency” as stress across the platform continues to construct.
