Justin Sun accuses Trump-linked DeFi project of having backdoor blacklist, firm threatens lawsuit

Tron (TRX) founder Justin Sun publicly criticized World Liberty Financial (WLFI), a DeFi project linked to the Trump family, for operating a blacklist and lacking transparent governance, prompting the project to threaten legal action. On April 12, Sun stated that while he had supported President Donald Trump and his crypto-friendly policies, he now condemns the series of token-related controversies surrounding WLFI. Sun, who made a significant investment in the project, said he initially believed it would bring the benefits of DeFi, such as financial freedom and disintermediation, to Americans. He pointed out that the smart contract used for WLFI token distribution contains a backdoor blacklist function, allowing the project to freeze, restrict, or confiscate token holders' assets without prior notice or just cause—a feature he described as the antithesis of decentralization. Sun also claimed that the project's structure was not determined by a legitimate governance vote, alleging that key information was withheld from voters and that the outcome was predetermined. In response, World Liberty Financial questioned if anyone still believes Sun, accusing him of "playing the victim to cover up his own wrongdoing." The project's team stated, "It's the same pattern every time, just the target has changed to WLFI." They added, "We have a contract and will see you in court." Recently, the price of WLFI hit an all-time low after it was revealed that World Liberty Financial had borrowed $75 million in stablecoins using billions of WLFI tokens as collateral. The project has also announced plans to gradually unlock tokens allocated to its early investors.