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Justin Sun has accused World Liberty Financial (WLFI) of hiding controls that could freeze token holders’ wallets without notice or recourse, escalating scrutiny of the project’s governance and lending activity.
Sun said WLFI concealed “blacklist controls” within its smart contract that could allow the company to “freeze, restrict, and effectively confiscate” assets without notice or a path for affected users to challenge the action. He described the feature as a “backdoor blacklisting function.”
The material provided did not include a response from WLFI.
Sun said he was “the first and single largest victim” of the alleged blacklist system. He claimed WLFI blocked his wallet in 2025, arguing the action violated investor rights and basic blockchain standards related to fairness and transparency.
He also challenged WLFI’s governance process, saying votes supporting these actions were not fair or transparent. Sun argued that key facts were withheld from voters and that participation was limited before outcomes were decided.
The dispute also comes amid questions about WLFI’s use of self-issued assets in lending activity. According to blockchain data cited in the report, WLFI committed large amounts of its own tokens and stablecoin to secure outside liquidity.
In February, the report said WLFI used around $14 million in USD1 to borrow about $11.4 million in USDC. Other transfers and deposits later pushed total borrowing above $75 million, while WLFI’s presence on Dolomite grew to a large share of the protocol’s liquidity.
Market data cited in the report showed WLFI’s token falling more than 21% over the past 30 days. The token traded below $0.08 as the accusations circulated, with concerns around liquidity use and withdrawals remaining in focus.
The report also said USD1 pool utilization neared 93% and that WLFI moved 3 billion tokens in early April. Sun said the project should “unlock the tokens and uphold transparency” as pressure around the platform continues to build.

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