Justin Sun slams Trump-linked DeFi project WLFI, project threatens legal action

Tron (TRX) founder Justin Sun publicly criticized World Liberty Financial (WLFI), a DeFi project linked to the Trump family, on April 12, citing its use of a blacklist function and opaque governance. In response, World Liberty Financial stated it possesses a contract and intends to take legal action. Sun said that while he had supported President Donald Trump and his crypto-friendly policies, investing heavily in WLFI with the belief it would bring DeFi benefits to Americans, he now condemns the project's recent token-related controversies. "The smart contract used by World Liberty for WLFI token distribution has a backdoor blacklist feature embedded in it," Sun pointed out. "This allows them to freeze, restrict, or confiscate the property rights of token holders without prior notice or just cause, which is the antithesis of decentralization." He also claimed the structure was not decided through a legitimate governance vote, with key information withheld from voters and meaningful participation restricted. World Liberty Financial countered, accusing Sun of "playing the victim to cover up his own misconduct." The project's team added, "It's the same pattern every time, but the target has just changed to WLFI. We have a contract and will see him in court." The dispute follows a recent price drop for WLFI, which hit an all-time low after it was revealed that the project had borrowed $75 million in stablecoins using billions of its own tokens as collateral. World Liberty Financial also announced it would begin a phased unlocking of tokens allocated to early investors.