Trump’s $5B Crypto Stake Locked as WLFI Crumbles in Turbulent Debut

World Liberty Financial’s WLFI token has seen a turbulent debut on the market, marked by sharp price declines, significant token burns, and controversy over insider trading and governance. Following its launch on Sept. 1, WLFI briefly peaked at $0.331 before dropping to as low as $0.16 within days. Onchain data indicates that 47 million WLFI tokens were burned on Sept. 2, reducing the total supply to 99.95 billion from an initial 100 billion. This move was part of a proposed buyback and burn program aimed at tightening supply and boosting scarcity. However, the impact of these measures remains limited, with the token still down over 31% from its opening high [1].

The volatility intensified after World Liberty Financial blacklisted Justin Sun’s blockchain address, which held approximately 595 million WLFI tokens. This decision followed several large transactions from Sun’s address, including a $9 million transfer. Sun disputed the accusations of market manipulation, stating that the transactions were merely “deposit tests” with no trading activity involved. The blacklisting triggered a 50% drop in WLFI’s price and raised concerns over centralization and governance transparency [3]. The controversy deepened when HTX, a platform linked to Sun, offered a 20% annual percentage yield on WLFI deposits, further fueling speculation about price manipulation [7].

The Trump family and other insiders hold a substantial stake in WLFI, with over 22.5 billion tokens valued at around $5 billion based on its opening price. These tokens, however, remain locked and cannot be sold until vesting periods expire. World Liberty Financial’s terms restrict individual wallets from exercising more than 5% of governance power to prevent outsized influence by early investors. Despite these safeguards, the rapid sell-offs by top holders—over 80% of the top 10 wallets reportedly cashing out within hours of the token’s launch—have raised concerns about speculative trading and market manipulation [4].

Phishing threats have also emerged as a growing concern. Security experts have warned of attacks exploiting Ethereum’s EIP-7702 standard, which could allow hackers to siphon assets from compromised wallets. One instance involved a malicious contract draining a WLFI wallet by pre-planting a delegate address. Analysts advise holders to front-run such attacks by paying gas fees to override the malicious contract and secure their assets [4]. The project’s limited supply—capped at 100 billion tokens—has so far prevented further inflation but has not stemmed the price decline, which has been exacerbated by heavy selling pressure and regulatory scrutiny [6].

Looking ahead, the market will closely watch the upcoming September token unlock, which is expected to release $483 million worth of tokens to early investors. While the buyback and burn program has reduced circulating supply by 0.19%, its long-term effectiveness remains uncertain amid continued volatility and skepticism. Derivatives trading has also surged, with futures open interest rising more than 50% in a week and daily volume increasing by nearly 400% at one point. These developments highlight the high-risk nature of the WLFI launch and underscore the challenges faced by new tokens in a rapidly evolving and highly speculative market [6]. The project’s ability to regain stability will depend on addressing governance concerns, enforcing transparent practices, and maintaining confidence among token holders.

Source:

[1] World Liberty Burns 47M Tokens as WLFI Price Slides (https://cointelegraph.com/news/wlfi-token-burn-price-drop-world-liberty-financial)

[2] New crypto token boosts Trump family's wealth by $5 billion (https://www.cbsnews.com/news/trump-wlfi-world-liberty-financial-crypto-wealth/)

[3] 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)

[4] 80% of top WLFI holders cash out within hours as phishing ... (https://finance.yahoo.com/news/80-top-wlfi-holders-cash-150223523.html)

[5] WLFI Token Total Supply Explained (https://www.bitget.com/wiki/wlfi-token-total-supply-wlfi-total-supply)

[6] WLFI Token Faces September Unlock – Can Burns Offset ... (https://finance.yahoo.com/news/wlfi-token-faces-september-unlock-194930419.html)

[7] WLFI Token Drops 50% After Justin Sun Blacklist (https://beincrypto.com/wlfi-token-plunges-after-justin-sun-blacklist/)