World Liberty Financial Blacklists Over 270 Wallets Amid Hacking Concerns
ByAinvest
Friday, Sep 5, 2025 5:14 pm ET2min read
BTC--
Galaxy researcher Zach Pokorny reported that WLFI had blocked 272 wallet addresses within its first week of trading [1]. Some of the restrictions were applied through bulk transactions, with initial blocklist actions appearing tied to pre-launch know-your-customer (KYC) checks. The motives for more recent blocklists remain uncertain.
The project's team stated, "A WLFI-designated wallet [has executed the] mass blacklisting of wallets identified as compromised (private-key loss) prior to launch. These on-chain actions thwarted attempted theft from the Lockbox" [3]. The Lockbox tool holds users' locked token allocations until they are unlocked.
The blacklist strategy has drawn sharper attention after reports emerged that an address connected to Tron founder Justin Sun had also been restricted. Sun publicly criticized the move, warning it could erode confidence in WLFI at a time when the project's political ties already make it highly scrutinized [1].
The blacklisting occurred against a backdrop of sharp price declines for WLFI. Since its launch on September 1, the token has seen its price fall from around $0.30 to below $0.18, a drop of more than 40% [2]. The decision to freeze Sun’s wallet has further intensified concerns among investors, particularly given his prominent position as one of the project’s largest individual investors and a key figure in its early success.
The blacklisting highlights the presence of centralized control in DeFi projects. While WLFI presents itself as a governance-driven initiative, its governance structure is operated by a Delaware non-stock corporation rather than a decentralized autonomous organization (DAO) [2]. The project allows token holders to vote on proposals, but voting power is capped at 5% per wallet, and the final authority for executing governance decisions lies with a multisignature wallet controlled by the project’s leadership.
The incident has also raised broader concerns about the risks associated with holding tokens that include administrative functions such as blacklisting. While Bitcoin and older blockchains are designed to resist such controls, many modern tokens incorporate smart-contract features that allow developers to freeze or restrict wallet activity. This underscores the importance for investors to carefully evaluate a project’s governance structure and smart-contract design before investing [2].
For now, the WLFI team has not indicated whether the blacklist will be lifted or whether further interventions are planned. Meanwhile, investor sentiment remains cautious, with many questioning the balance between security and decentralization in the project’s governance model. The blacklisting of one of WLFI’s largest backers may serve as a cautionary tale for both developers and investors in the DeFi space.
References:
[1] https://cryptoslate.com/insights/apart-from-justin-suns-wallet-world-liberty-financial-has-blacklisted-over-270-additional-wallets/
[2] https://www.ainvest.com/news/defi-decentralization-dilemma-wlfi-freezes-justin-sun-wallet-2509/
[3] https://www.bitdegree.org/crypto/news/wlfi-locks-out-hackers-with-blacklist-ahead-of-token-launch
World Liberty Financial (WLFI), a DeFi project linked to US President Donald Trump, has blacklisted over 270 wallet addresses since its launch on Sept. 1. The move aligns with WLFI's earlier disclosure that it blocked wallets during its token rollout to counter hacking attempts. WLFI's blocklist strategy has drawn attention, including criticism from Tron founder Justin Sun, who warns it could erode confidence in the project.
World Liberty Financial (WLFI), a DeFi project linked to US President Donald Trump, has blacklisted over 270 wallet addresses since its launch on Sept. 1. The move aligns with WLFI's earlier disclosure that it blocked wallets during its token rollout to counter hacking attempts. WLFI's blocklist strategy has drawn attention, including criticism from Tron founder Justin Sun, who warns it could erode confidence in the project.Galaxy researcher Zach Pokorny reported that WLFI had blocked 272 wallet addresses within its first week of trading [1]. Some of the restrictions were applied through bulk transactions, with initial blocklist actions appearing tied to pre-launch know-your-customer (KYC) checks. The motives for more recent blocklists remain uncertain.
The project's team stated, "A WLFI-designated wallet [has executed the] mass blacklisting of wallets identified as compromised (private-key loss) prior to launch. These on-chain actions thwarted attempted theft from the Lockbox" [3]. The Lockbox tool holds users' locked token allocations until they are unlocked.
The blacklist strategy has drawn sharper attention after reports emerged that an address connected to Tron founder Justin Sun had also been restricted. Sun publicly criticized the move, warning it could erode confidence in WLFI at a time when the project's political ties already make it highly scrutinized [1].
The blacklisting occurred against a backdrop of sharp price declines for WLFI. Since its launch on September 1, the token has seen its price fall from around $0.30 to below $0.18, a drop of more than 40% [2]. The decision to freeze Sun’s wallet has further intensified concerns among investors, particularly given his prominent position as one of the project’s largest individual investors and a key figure in its early success.
The blacklisting highlights the presence of centralized control in DeFi projects. While WLFI presents itself as a governance-driven initiative, its governance structure is operated by a Delaware non-stock corporation rather than a decentralized autonomous organization (DAO) [2]. The project allows token holders to vote on proposals, but voting power is capped at 5% per wallet, and the final authority for executing governance decisions lies with a multisignature wallet controlled by the project’s leadership.
The incident has also raised broader concerns about the risks associated with holding tokens that include administrative functions such as blacklisting. While Bitcoin and older blockchains are designed to resist such controls, many modern tokens incorporate smart-contract features that allow developers to freeze or restrict wallet activity. This underscores the importance for investors to carefully evaluate a project’s governance structure and smart-contract design before investing [2].
For now, the WLFI team has not indicated whether the blacklist will be lifted or whether further interventions are planned. Meanwhile, investor sentiment remains cautious, with many questioning the balance between security and decentralization in the project’s governance model. The blacklisting of one of WLFI’s largest backers may serve as a cautionary tale for both developers and investors in the DeFi space.
References:
[1] https://cryptoslate.com/insights/apart-from-justin-suns-wallet-world-liberty-financial-has-blacklisted-over-270-additional-wallets/
[2] https://www.ainvest.com/news/defi-decentralization-dilemma-wlfi-freezes-justin-sun-wallet-2509/
[3] https://www.bitdegree.org/crypto/news/wlfi-locks-out-hackers-with-blacklist-ahead-of-token-launch
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