World Liberty Financial (WLFI), linked to Donald Trump’s family, faces trouble following investors' complaints about token freezes.
Token Freezes and Allegations
The timeline of events surrounding WLFI intensified after high-profile investors alleged that their tokens were frozen. Polygon developer Bruno Skvorc claimed on X that his wallet was flagged as 'high risk', and the project refused to unlock his assets. He accused WLFI of 'stealing' funds, describing the situation as a 'new age mafia'.
Skvorc noted that he was one of six investors subjected to complete lockups from the start. WLFI justifies the freeze using compliance tools citing indirect links to sanctioned entities, past use of Tornado Cash, and flagged dashboards—issues that on-chain analysts argue often reflect false positives.
Justin Sun's Reaction
The situation escalated when Justin Sun, founder of Tron and one of WLFI's biggest backers, revealed that his allocation had also been frozen. Investing at least $75 million into WLFI, he stated that his wallet was blacklisted after a $9 million transaction was flagged. In a post on X, he described the freeze as 'unreasonable' and against the core principles of blockchain, urging WLFI to unlock his funds.
Blockchain data reviewed by Nansen showed WLFI's 'guardian address' blacklisted Sun's wallet containing approximately 545 million tokens. Before the freeze, he transferred 50 million tokens to another address. WLFI had previously pledged that early investors could sell up to 20% of their holdings, but Sun's case suggests the restrictions go further.
Future of WLFI and Trust Issues
WLFI acknowledged community concerns about wallet blacklisting but insisted it only reacts to 'malicious or high-risk activity.' The company did not mention Sun or Skvorc by name. The price of the $WLFI token, which launched last week at over 30 cents, dropped to around 18 cents by Friday, according to CoinGecko.
With two high-profile investors publicly disputing its practices, WLFI faces a test of credibility. How the project resolves disputes with Sun and Skvorc may influence whether other backers remain engaged. More broadly, the situation underscores the tension between compliance tools, project governance, and investor expectations in politically charged crypto ventures.
The token freezes of WLFI raise serious questions about the project's trust and transparency, particularly against the backdrop of its clear links to politically significant figures.
