World Liberty Bans Sun’s Wallet as WLFI Plummets 42%

World Liberty Financial (WLFI), the Trump family-backed decentralized finance project, has taken action by blacklisting Justin Sun’s Ethereum wallet following a $9 million token transfer, according to blockchain data from Nansen and Arkham. The move has raised questions about the token’s market volatility and trading restrictions, particularly as WLFI has seen a 20% decline in the past 24 hours and a 42% drop since its trading debut on September 1 [1].

The blacklisted wallet, which contains 595 million unlocked WLFI tokens valued at roughly $107 million, was flagged after executing multiple outbound transactions, including a $9 million transfer to crypto exchange HTX [1]. Justin Sun, founder of the Tron blockchain and a key investor in WLFI, responded to the controversy on X, stating the address had only conducted a few routine exchange deposit tests with small amounts of tokens before dispersing them. He emphasized that the transactions did not involve buying or selling and “could not possibly have any impact on the market” [2].

Sun’s involvement with WLFI began in late 2024, with an initial $30 million investment and a role as an advisor. By mid-2025, his total investment had grown to around $75 million, and prior to the token’s public launch, he was estimated to hold nearly $700 million worth of WLFI tokens, with a significant portion still vesting-locked [1]. At the Token Generation Event (TGE) on September 1, Sun claimed 600 million WLFI tokens, worth approximately $200 million, representing 3% of the 20 billion unlocked supply [3].

Despite Sun’s public commitment to holding his unlocked tokens, the blacklisting has intensified speculation about potential selling pressure. The move comes as World Liberty Financial seeks to stabilize WLFI’s price through a token burn and buyback program. On Wednesday, the project burned 47 million tokens to reduce the circulating supply, while also proposing a buyback plan funded by protocol fees, with all repurchased tokens to be burned [2]. These measures aim to create a deflationary mechanism, theoretically increasing value for remaining token holders. However, WLFI’s total supply remains at around 99.95 billion, and the token continues to rank among the most bearish in terms of market sentiment [2].

Market data shows that WLFI’s price reached a high of $0.32 at the time of its launch but has since fallen below $0.18. The token’s 24-hour trading volume has surged to over $2.57 billion, accounting for 41.5% of its market capitalization [3]. The sharp price decline has raised investor concerns, particularly amid reports of significant losses among large holders. Some analysts have criticized WLFI as a high-risk investment, with Compass Point labeling it a potential “catalyst that could decimate retail traders” [6].

The controversy has also sparked broader discussions about the role of major stakeholders in cryptocurrency markets. While Sun has denied any intention to sell, and Nansen data has confirmed no direct link between the token activity and the recent price drop, the blacklisting remains a point of contention. The incident highlights the complex interplay between market dynamics, project governance, and the influence of high-profile investors in the volatile DeFi space [1].

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] Justin Sun Claims $200M of Trump's WLFI Token Unlock (https://finance.yahoo.com/news/justin-sun-claims-200m-trump-174018314.html)

[4] Justin Sun Has $700 Million WLFI After Launch (https://info.arkm.com/research/justin-sun-wlfi-launch-world-liberty-trump)

[5] WLFI Price Jumps 9% as Justin Sun's HTX Exchange ... (https://finance.yahoo.com/news/wlfi-price-jumps-9-justin-123856694.html)

[6] World Liberty Blacklists Justin Sun's Ethereum Wallet After ... (https://finance.yahoo.com/news/world-liberty-blacklists-justin-suns-193804789.html)