Legal tensions in the crypto industry continue to escalate as Justin Sun publicly accused World Liberty Financial – a DeFi project backed by President Donald Trump's family – of secretly installing a "blacklist backdoor" in the WLFI Token 's smart contract. In response, the project announced its readiness to sue, pushing the confrontation between the two sides to its most intense level to date and becoming a new focal point of the global cryptocurrency market.
According to a social media post by Justin Sun on the morning of April 12th, the TRON founder claims that the WLFI deployment contract contains an undisclosed blacklist function, allowing the project team to unilaterally freeze, restrict, or even seize the assets of any holder without notice, reason, or appeal mechanism. Sun describes this design as completely contradicting the initial promise of decentralization, calling it "a trapdoor marketed as an open door."
Notably, Justin Sun was once the largest outside investor in the project. He stated that he was the "biggest victim," with his wallet being blacklisted in September 2025 after moving approximately $9 million worth of WLFI between addresses. According to Sun, this Token freezing caused his WLFI portfolio – estimated at around 545 million Token – to lose over $80 million in value as the Token price plummeted in line with the general downward trend.
These allegations represent a significant escalation compared to previous disputes. Last September, Sun merely requested the unlocking of Token Lockup and called the project's decision "unreasonable." But in the new statement, he accuses World Liberty Financial of secretly installing governance controls, charging users fees, and organizing governance votes with "predetermined outcomes." Despite this, Sun still emphasized his support for President Trump's crypto-friendly policies and that he was only targeting "individuals who acted wrongly within WLFI."
The relationship between the two sides was once very close. Justin Sun invested $30 million in the project in late 2024, was appointed as an advisor, and later increased his total commitment to approximately $75 million, alongside a $100 million investment in the TRUMP memecoin. Therefore, the current confrontation is all the more noteworthy as it turns one of the biggest donors into one of the strongest critics.
Hours after Sun's statement, World Liberty Financial launched a direct counterattack , accusing him of " Vai the victim" and making baseless accusations to cover up his wrongdoing. The project asserted they had contracts, evidence, and facts, concluding with a blunt message: "See you in court." Sun immediately responded, demanding that those behind the project's official account reveal their identities instead of "hiding in the shadows."
The timing of the dispute coincided with a series of other controversial revelations about the project's financial situation. WLFI had just fallen to a record low after revelations emerged that the project treasury had pledged 5 billion WLFI Token on the Dolomite lending platform to borrow approximately $75 million USDC and USD1. Notably, over $40 million of this was transferred to Coinbase Prime, raising concerns about risk management and financial transparency. This position now accounts for more than half of Dolomite's total asset supply, while the protocol's USD1 pool has reached nearly 93% utilization.
A more contentious factor is the fact that Dolomite co-founder Corey Caplan also serves as advisor and CTO of World Liberty Financial. This overlap has led the community to question conflicts of interest and the possibility of centralized governance in a project that claims to be DeFi.
