Following the TUSD incident, Sun Ge has been scammed again.
Written by Eric, Foresight News
On the afternoon of April 12th, Beijing time, Justin Sun published a accusation on X against World Liberty Financial (WLFI), a project controlled by the Trump family. This is the third wave of public opinion surrounding the WLFI project recently, following the incidents of using WLFI as collateral to borrow USD1 and the revelations of misconduct by an "insider."
In his tweet, Justin Sun enumerated WLFI's numerous misdeeds, including "extracting fees from users, secretly implanting backdoors to control user assets, freezing investor funds without disclosure or due process, and treating the crypto community as a personal ATM." Furthermore, Justin Sun stated, "The governance votes cited to justify these actions were not conducted through fair or transparent procedures. Key information was withheld from voters, substantive participation was restricted, and the results were predetermined. These votes did not represent the will of the community, but the will of those who designed them."
A few hours later, the official WLFI X account gave a brief response, saying that pretending to be a victim was Justin Sun's usual trick, and that if they disagreed, they could go to court.
Investors blacklisted by project team
A year ago, Justin Sun publicly launched a "rights protection campaign." This stemmed from his takeover of the stablecoin TUSD, where he entrusted reserve assets to First Digital Trust (FDT), only to discover that FDT had transferred these assets without authorization. Although the transferred assets have since been frozen, the matter is not entirely over.
This accusation against WLFI dates back to September 2025.
In October 2024, WLFI launched its token public offering. The first round of public offering released a total of 2 billion WLFI at a price of $0.015. Justin Sun publicly announced on November 25th that he would invest $30 million to support WLFI, while prior to this, WLFI's fundraising progress was only $21 million. In January 2026, WLFI added another 500 million WLFI to its public offering, raising the price to $0.05. Justin Sun invested another $45 million, bringing his total investment of $75 million to make him WLFI's largest external investor at the time.
At that time, Justin Sun was still dealing with lawsuits from the U.S. Securities and Exchange Commission (SEC) against him for "unregistered offering and sale of securities" and "market manipulation and fraud." Market speculation suggested that investing heavily in the WLFI project was a form of "surrender," as even if it couldn't resolve the SEC lawsuit, it would at least help with future promotion and publicity in the U.S.
Justin Sun shows off the watch that Trump gave him.
Afterwards, Justin Sun's interactions with the Trump family became more frequent, and their cooperation seemed to have entered a "honeymoon period." However, this relationship was instantly shattered after the issuance of the WLFI token.
In early September 2025, shortly after WLFI officially opened for trading, on-chain activity monitoring platforms such as Arkham and Nansen discovered that an address associated with Justin Sun transferred over 50 million WLFI tokens (worth over $9 million at the time) to exchanges. Hours later, WLFI blacklisted the address and froze all unlocked and locked WLFI tokens.
WLFI stated that freezing Justin Sun addresses could trigger market panic and cause a sharp drop in the price of WLFI tokens; the freeze was to protect investors. Furthermore, WLFI stated that a total of 272 addresses were frozen, not specifically targeting Justin Sun, and claimed to have evidence that Justin Sun violated the agreement's terms.
But Justin Sun insisted that he only "conducted a few random exchange deposit tests, with very low amounts, and then distributed the addresses, without involving any buying or selling, so it was impossible for him to have any impact on the market."
According to on-chain data, there were indeed transfers at addresses starting with 0x5AB related to Justin Sun, but these occurred around 17:00 on September 4, 2025, later than the time of the sharp drop, and there was indeed insufficient evidence to confirm the sell-off.
After a brief dispute, the matter quickly faded away. Trump continued his frenzied trading of stock charts, and Justin Sun successfully surveyed Earth from space until yesterday afternoon…
Feeling "treated specially,"Justin Sun calls on WLFI to "disclose information."
In response to WLFI's threat to take legal action, Justin Sun did not refute it further. Instead, he demanded that the controllers behind the WLFI X account and the entire project come forward and reveal their identities. As the largest early external investor, and arguably the one who provided significant assistance to WLFI in completing its public offering, Justin Sun, having been used and discarded, adopted a suicidal stance.
Normally, Justin Sun pronouncements on X would draw a barrage of ridicule, but this time, many have taken a stand against WLFI. The timing of this statement is also interesting. Just three days prior, WLFI's multi-signature addresses used 5 billion WLFI to lend a total of 75 million stablecoins around Dolomite, sparking accusations of a "runaway" scheme. Yesterday morning, an X user named Peter Girnus, claiming to be a WLFI Web3 ambassador, exposed a scandal involving WLFI's rampant fundraising while simultaneously exploiting loopholes to evade risk.
Although WLFI later repaid its $25 million loan on Dolomite, and Peter Girnus was proven to be unrelated to WLFI, the concentrated public accusations left WLFI besieged on all sides. Just then, Justin Sun stepped forward again.
A user named banteg pointed out what might be the most important reason that broke Justin Sun defenses: Justin Sun is the only person who was directly blacklisted by a single address.
According to its description, the initial WLFI token contract deployed in September 2024 did not have blacklisting and confiscation functions, but the contract was upgradable. On August 24, 2025, 11 months after Justin Sun investment and one week before the trading launch, the token contract was upgraded to v2, and the blacklist function was secretly added. In another upgrade on November 19, 2025, the project team added a "bulk redistribution" function (essentially confiscation), ostensibly to "rescue funds that have been phished."
For most investors, the official team has set up mechanisms such as lock-up periods and linear unlocking to allow tokens to be unlocked in batches. However, WLFI did not use these to restrict Justin Sun at all. Instead, it gave him 20% to be unlocked immediately in full, but the remaining 80% has not made any progress in unlocking to date (claimable() is still 0).
Most outrageously, WLFI created a special category specifically for Justin Sun address, making him the sole user. Fourteen minutes before WLFI opened trading, 3/5 of the WLFI team's multisignature wallets set this category to "20% freely transferable." After Justin Sun was deemed "market disruptor," his address was directly blacklisted by a single Guardian EOA (also a multisignature member). This address possessed unique permissions, allowing it to freeze anyone with just one signature.
In other words, if the WLFI official team wanted to confiscate the remaining WLFI tokens in an address, it would require 3/5 multi-signature, but adding someone to the blacklist only requires one person's signature. Moreover, according to Banteg's description, WLFI seems to have never intended for Justin Sun to take the remaining 80% in the first place.
Justin Sun also retweeted this tweet and demanded that WLFI disclose the multisignature and the true identity of the person with the high-level access address. Justin Sun stated that if this information is not disclosed, then WLFI's so-called decentralized governance is nothing but a show, and if WLFI has nothing to hide, it should disclose it.
Seven months after the blacklist incident, Justin Sun suddenly made a public statement on X. This move led many to speculate that the two sides had also communicated and negotiated privately over the past seven months, but the matter was not properly resolved. Although Justin Sun still made a considerable profit compared to the public offering prices of $0.015 and $0.05, with the remaining approximately 2.85 billion tokens still worth over $220 million, this was based on the premise that he could sell them.
Many investors in Europe and America who were scammed by WLFI have expressed their dissatisfaction with WLFI and Trump behind it. Some even joked that "UST is much better than WLFI." However, the market is not entirely filled with voices condemning WLFI. The founders of weRate and Coin Compass stated that the HTX exchange offered very high yields to attract unlocked tokens after WLFI tokens were opened for trading, which sparked speculation that "it may have been borrowing users' tokens to sell and then returning them after its own tokens were unlocked."
Currently, discussions about the facts behind this lack concrete evidence, and the details of the agreement that WLFI claims Justin Sun violated are also unknown. The truth of the feud between the two parties may only be revealed in court.
