Justin Sun Criticizes WLFI Governance Proposal as Crypto Controversy Escalates

Tron founder Justin Sun has launched a public attack on World Liberty Financial (WLFI), a Trump-linked cryptocurrency project, accusing it of orchestrating what he called “one of the most absurd governance scams” in the sector. The dispute has intensified scrutiny from investors and the broader blockchain community.

Sun’s allegations: governance as coercion

In a post on X, Sun alleged that WLFI’s latest governance proposal is designed to punish token holders who oppose it. He said voters against the measure could face indefinite token lockups, which he characterized as financial coercion rather than decentralized governance.

Sun also claimed that tokens representing about 4% of voting power under his control had been frozen, arguing this effectively silenced major stakeholders. He further questioned the legitimacy of the process, citing anonymous wallet addresses, a multisignature setup that could override votes, and an account with blacklisting authority.

“This proposal is not governance,” Sun stated. “It is an exercise of power by the selected few.”

WLFI proposal: token lockup restructuring and burn

The controversy centers on WLFI’s proposal to restructure token lockups across its ecosystem. Under the plan, more than 62 billion tokens would be placed into multi-year vesting schedules. Sun’s account says insiders would face a two-year lockup followed by a five-year gradual release period, along with a 10% token burn.

Sun also alleged that holders rejecting the new terms would face permanent token locks, and that up to 4.5 billion tokens could ultimately be destroyed.

Reaction from investors and WLFI’s response

Simon Dedic, founder of Moonrock Capital, echoed Sun’s concerns, saying early investors had been effectively “rugged” by the Trump-affiliated project.

WLFI defended the proposal, describing it as a long-term alignment strategy for ecosystem participants.

Background: a months-long feud

The confrontation is the latest development in a months-long dispute between Sun and WLFI. Earlier, WLFI blacklisted a wallet linked to Sun that held roughly $107 million in governance tokens. The conflict follows a reversal from late 2024, when Sun invested $30 million in the project and served as an advisor.