DeFi Drama Unfolds as WLFI Freezes Justin Sun’s $107M Wallet

World Liberty Financial (WLFI) has blacklisted the blockchain address of Tron founder and key investor Justin Sun, freezing approximately 540 million unlocked WLFI tokens valued at around $107 million at current prices, according to blockchain analytics firm Arkham [1]. The action followed several outbound transactions from Sun's address, including one for $9 million in WLFI tokens, on the Ethereum blockchain [2]. Sun has denied any involvement in dumping or market manipulation, stating that these transactions were routine exchange deposit tests with minimal impact on the market [4].

Sun, who initially invested $30 million in WLFI in late 2024 and later increased his stake to $75 million, is one of the protocol's largest external investors. At the time of WLFI's market debut on September 1, 2025, Sun reportedly held nearly $700 million worth of tokens, much of it still vesting-locked [1]. In response to the blacklisting, Sun publicly urged the WLFI team to unfreeze his tokens and adhere to the principles of fairness, transparency, and trust [4].

The WLFI token has seen significant volatility since its launch. It briefly surged to a high of $0.46 within hours of listing but has since fallen sharply, trading below $0.18 by mid-week [4]. The token has lost over 60% of its value in its first week, raising concerns among investors and analysts about governance and market dynamics [5]. The price drop coincided with a broader sell-off in the crypto market, as well as skepticism over the influence of large whale holders.

WLFI’s team has taken steps to stabilize the token’s value, including burning 47 million tokens and announcing a potential buyback and burn program funded by protocol fees [2]. Despite these efforts, the token ranks among the most bearish in terms of market sentiment, according to CoinMarketCap [2]. The blacklisting of Sun’s wallet has also sparked public debate over the governance structure of the project, with critics questioning the centralized control of what was marketed as a decentralized platform [4].

Sun’s legal and financial entanglements have drawn additional scrutiny. He has been involved in ongoing legal disputes, and WLFI’s association with U.S. political figures, including Donald Trump and his family, has raised regulatory concerns [3]. Trump’s family reportedly holds 22.5 billion WLFI tokens, with their value briefly reaching $5 billion before the recent downturn [3]. The project’s governance decisions, including the blacklisting of Sun’s address, have been seen as a test of its commitment to decentralized principles.

As the standoff continues, the broader implications for WLFI’s governance model and market confidence remain unclear. Sun’s public stance and the project’s response will likely play a critical role in shaping the future trajectory of the token and investor sentiment in the coming weeks.

Source:

[1] World Liberty Financial blacklists Justin Sun's address with USD107m WLFI (https://www.coindesk.com/tech/2025/09/04/world-liberty-financial-blacklists-justin-sun-s-address-with-usd107m-wlfi)

[2] Justin Sun's WLFI address blacklisted after $9M token transfer (https://cointelegraph.com/news/justin-sun-wlfi-address-blacklisted)

[3] World Liberty Freezes Justin Sun's $900 Million In WLFI (https://beincrypto.com/world-liberty-freezes-justin-sun-wlfi-tokens/)

[4] Justin Sun Replies to WLFI Wallet Blacklist, Asks World Liberty to Unfreeze Tokens (https://finance.yahoo.com/news/justin-sun-replies-wlfi-wallet-062513385.html)

[5] WLFI Blacklists Justin Sun: Billions in Tokens Frozen After... (https://www.ccn.com/news/crypto/wlfi-blacklists-justin-sun-billions-tokens-frozen-dumping/)