Justin Sun's wallet was frozen by World Liberty Financials after a governance vote raised concerns over token manipulation.
WLFI Token Freeze and Launch Timeline
Justin Sun’s wallet was frozen during the WLFI token launch this week following a governance vote due to concerns over his trading activity.
Records indicated that 540 million WLFI tokens were unlocked while another 2.4 billion remained locked.
WLFI launched on September 1 at $0.20, placing its market value close to $1 Billion. Approximately 6.8% of its supply entered circulation, divided between community distribution and marketing. Sun holds around 3% of the total supply.
Only 20% of his share was unlocked initially, with the remainder intended to stay locked longer. The price of WLFI declined shortly after the launch despite high trading volumes.
Market Pressure Allegations and Past Cases
Allegations emerged that Sun may have utilized his exchange HTX to access user tokens. Reports indicated that HTX offered 20% returns to those who deposited WLFI.
This raised concerns that user funds could be borrowed out, allowing Sun to indirectly sell his holdings while bypassing the vesting schedule. Critics argued this provided a means for him to offload locked tokens.
Observations also drew parallels with past incidents involving Sun, where the SEC accused him of manipulating TRX trades between 2018 and 2020. In 2024, he faced scrutiny regarding reserve reporting at HTX.
Analysts pointed to high funding rates, signs of wash trading, and discrepancies between trading volume and price movements, leading governance members to conclude a freeze was necessary for project protection.
Justin Sun Denies Wrongdoing
In response to the allegations, Justin Sun issued a public statement denying the claims. He asserted he was an early major investor in World Liberty Financials and that his tokens were acquired in the same manner as those of other investors.
Sun argued that freezing his address contradicted the core values of blockchain, calling for equal treatment among investors. He emphasized that the strength of the project should rely on fairness and community support.
Sun urged the team to unlock his tokens and collaborate for the project's future, stating that unilateral freezes could be detrimental to investors and the broader ecosystem. The freeze remains in effect, with no confirmation of when or if locked funds will be released.
The situation surrounding Justin Sun and WLFI highlights the complexities of market trading and the necessity for transparency in the cryptocurrency space.
