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World Liberty Financial (WLFI) has filed legal action against Justin Sun, the founder of Tron and WLFI’s largest private investor, after Sun went public with allegations about the DeFi platform’s token smart contract. The dispute follows the breakdown of a partnership that had been publicly positioned as high-profile.
Sun initially invested $30 million in WLFI in November 2024, later increasing his total commitment to more than $75 million. He was appointed as an advisor to the project in December 2024, shortly after WLFI reshuffled its Bitcoin holdings by swapping cbBTC for WBTC.
The relationship deteriorated in September 2025, when WLFI blacklisted Sun’s wallet following on-chain activity that showed outbound token transfers. The report cited one transaction valued at approximately $9 million.
Sun alleges that WLFI embedded an undisclosed freeze function into its token smart contract. He claims the mechanism gives WLFI unilateral power to lock any holder’s assets without prior notice or legal recourse, and he describes himself as the first and most severely affected victim.
Sun’s holdings are reportedly frozen. WLFI’s token is described as down roughly 76% from its all-time high of $0.30, with Sun reportedly losing about $60 million in value. He says he is unable to sell, hedge, or adjust his position.
WLFI has rejected Sun’s claims as baseless and accused him of attempting to deflect attention from his own alleged misconduct. The project said it has contracts and evidence to support its position, indicating the matter is set to proceed in court.
Separately, a DeFi analyst raised conflict-of-interest concerns after identifying Dolomite, a lending protocol that reportedly allows $292 million in borrowing against $400 million in WLFI collateral. The analyst noted that Dolomite’s founder also serves as WLFI’s chief technology officer.
At the time of writing, WLFI tokens were trading at $0.079.
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