DeFi Principles Clash as Sun Demands Unfreeze of $107M in WLFI

Justin Sun, founder of Tron, has called on the World Liberty Financial (WLFI) team to unlock his frozen token allocation, which includes 595 million WLFI tokens worth approximately $107 million at current prices. The move follows Sun’s recent transfers of tokens to the HTX exchange, including a $9 million transaction that triggered scrutiny from blockchain analytics platforms like Arkham and Nansen. The blacklisting of his address was described by Sun as “unreasonable” and a violation of the principles of decentralized blockchain technology. He emphasized that no buying or selling was involved in these transactions and that such actions could not have impacted the market [1].

World Liberty Financial, a crypto project linked to former U.S. President Donald Trump and his family, initially froze Sun’s address after detecting what it deemed high-risk activity. The platform claimed it took the step to protect the broader community and maintain the integrity of the project. However, Sun argues that the freeze undermines the core values of decentralization and fairness, stating that investor rights have been violated and that the action could damage trust in the project. In a statement on X, he called for the WLFI team to “respect these principles, unlock my tokens, and let’s move forward together toward the success of World Liberty Financials.” [2].

Sun, a major early investor in WLFI, has been a vocal supporter of the project since its inception. He initially invested $30 million in the token in late 2024 and has since increased his investment to around $75 million. By early 2025, his total stake in WLFI was estimated at nearly $700 million, much of which remained vesting-locked. Despite being one of the largest holders, Sun’s recent actions have drawn criticism from some analysts who accuse him of attempting to manipulate the market by locking up tokens and offering high yields to HTX users. Others, including Alex Svanevik of the Nansen AI platform, have suggested that Sun is not engaged in selling, citing on-chain data that indicates no direct market dumping [3].

The controversy has also raised questions about the broader governance structure of WLFI. The project, which aims to build a decentralized finance (DeFi) application, has seen its token price drop by over 42% since its trading debut on September 1. The price continued to decline by 20% in the 24 hours following the blacklisting. Analysts have speculated that the decision to freeze Sun’s tokens may have alienated one of the project’s most influential and high-profile backers. The move has also sparked debate about the extent to which centralized control should play a role in decentralized projects, with some arguing that such actions undermine the very principles of DeFi [4].

Ki Young Ju, CEO of CryptoQuant, has publicly supported Sun’s call for the tokens to be unlocked, aligning with his view that transparency and fairness are essential for the success of any blockchain project. In a separate statement, he emphasized that the broader crypto community should remain vigilant about how governance decisions are made, particularly in projects with high-profile backers. This sentiment has been echoed by other members of the industry who argue that WLFI’s actions could set a dangerous precedent for how investor assets are treated in decentralized environments [5].

As the debate continues, both Sun and WLFI have yet to provide a clear resolution. The outcome of this standoff could have significant implications for the future of WLFI and the broader DeFi ecosystem. If the tokens remain frozen, it could signal a shift in how governance is managed in decentralized projects, potentially leading to more centralized control. Conversely, if the tokens are unlocked, it may reinforce the principles of decentralization and investor rights. The situation remains fluid, with market participants closely watching for any further developments [6].

Source:

[1] Justin Sun urges Trump's WLFI to unlock “unreasonably” ... (https://cointelegraph.com/news/justin-sun-trump-wlfi-unlock-frozen-token)

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

[3] Billionaire Justin Sun begs Trump-backed World Liberty ... (https://fortune.com/crypto/2025/09/05/justin-sun-donald-trump-world-liberty-financial-blacklisted-crypto-address-wlfi/)

[5] Trump-Backed World Liberty Token Falls 50% From Peak ... (https://decrypt.co/338102/trump-backed-world-liberty-falls-50-peak-early-buyers-still-profit)