The crypto market is in turmoil following an internal scandal at World Liberty Financial , as TRON founder Justin Sun unexpectedly publicly accused the DeFi project, linked to the Donald Trump family, of installing "backdoors" in smart contracts to control and seize investors' Token . This move comes at a time when WLFI is experiencing its most serious crisis of confidence since its launch, sparking intense debate within the DeFi community about transparency and control over assets on the blockchain.
Chia to Justin Sun, the WLFI development team secretly integrated a blacklist mechanism directly into the smart contract without disclosing it in technical documentation or communicating it to investors. This function allows the project to freeze or seize Token from any wallet that is blacklisted. What's shocking is Justin Sun's claim that his own wallet was blacklisted in 2025, resulting in the freezing of all his WLFI holdings without any clear explanation.
The allegations emerged at a time when WLFI's financial situation and reputation were plummeting. The WLFI Token price fell to a record low of approximately $0.07967, marking its historical Dip since listing. Simultaneously, the on-chain analytics platform Arkham Intelligence discovered that the WLFI team had pledged approximately $406 million worth of WLFI Token through two wallets to borrow $150 million USDC on the Dolomite lending protocol. Using the Governance Token as collateral raised questions within the community about liquidation risks and potential price manipulation.
Pressure intensified when WLFI was forced to urgently repay a $25 million debt within the first three days of April to appease public opinion and avoid liquidation. Simultaneously, a conflict of interest was exposed when Corey Caplan – co-founder of Dolomite – also served as an official advisor to World Liberty Financial. This overlapping relationship raised questions about the transparency of the loan transactions and project management.
