Justin Sun is once again at the center of crypto controversy but this time over alleged dumping of WLFI tokens. The project’s decision to blacklist his wallet has sparked a fierce debate over transparency, fairness, and decentralization.
- WLFI blacklisted a wallet linked to Justin Sun after nearly 60 million tokens were moved to Binance.
- Sun denied selling, calling the blacklisting unjust and a breach of investor rights.
- The crypto community is split, with some defending Sun and others accusing him of indirect dumping.
- WLFI price has dropped 17.9% in 7 days as concerns rise over centralization and protocol trust.
World Liberty Financial has blacklisted an address linked to Tron founder Justin Sun, affecting 595 million worth of unlocked WLFI (WLFI) tokens and sparking a wave of controversy and renewed scrutiny over centralization and governance within the newly launched protocol.
According to on-chain data, WLFI’s controlling address executed the guardianSetBlacklistStatus function on the WLFI token contract, freezing activity from an address known to be associated with Sun. The move followed suspicious activity tied to HTX address “HTX 48,” which transferred nearly 60 million WLFI tokens to a Binance deposit wallet within 32 hours.
WLFI’s core team has not released a formal explanation, but market observers believe the action was triggered by concerns that Sun’s address was offloading tokens, potentially triggering or contributing to a sharp price decline.
The blacklisting appears to be an attempt to prevent further market disruption and calm investor fears, especially in light of WLFI’s volatile debut.
Sun denies dumping WLFI, claims wallets were wrongly frozen
Justin Sun responded on X (formerly Twitter), asserting that the transfers were routine deposit tests and portfolio shuffling, not sales.
“Our address only conducted a few small deposit tests to the exchange, followed by some address splitting,” Sun wrote. “There was no buying or selling involved, and it could not have had any market impact.”
In a follow-up post, Sun described the blacklisting as unjust, arguing that it violated core principles of blockchain transparency and investor fairness.
“As one of the early investors, I joined together with everyone—we bought in the same way, and we all deserve the same rights,” he said. “This action risks undermining trust in WLFI.”
Sun’s defense references his earlier public statement shortly after WLFI’s launch, where he claimed to have no plans to sell unlocked tokens and expressed alignment with the project’s long-term mission. Reports confirm he holds over $891 million in WLFI, after a $30 million investment in November.
Industry analysts and on-chain sleuths have weighed in, with some supporting Sun’s version of events. Blockchain data firms like Nansen found no direct evidence of Sun selling large WLFI volumes from his blacklisted wallet. However, others remain skeptical.
One user on X accused Sun of using user deposits to offload WLFI through indirect means, suggesting a scheme involving a “20% APY” yield program. The user claimed this allowed Sun to bypass blacklisting while still exerting sell pressure, a tactic critics say amounts to “disguised dumping.”
Supporters of WLFI’s move argue that the protocol is within its rights to intervene during price instability, especially after a chaotic launch that saw missing supply disclosures and massive whale movements. However, the decision has also drawn backlash, with critics warning that blacklisting investors without formal disclosure could erode confidence and challenge WLFI’s claims of decentralization.
WLFI slides amid market uncertainty
WLFI officially began trading on Monday, backed by a venture linked to U.S. President Donald Trump. The token surged briefly to $0.32, but has since dropped over 17.9% on the weekly chart, currently trading below $0.18, according to market data crypto.news.
In an effort to restore market stability, the WLFI team has proposed a buyback-and-burn program, even burning 47 million tokens. While the move could help reduce supply and support price action, uncertainty around wallet blacklisting and governance transparency continues to weigh on sentiment.
