Project Background and Initial Success WLFI raised hundreds of millions of dollars during its token sales. The WLFI governance token attracted investors drawn to the Trump family brand. According to reports, the project generated over $460 million in revenue for the Trump family in the first half of 2025, thanks to a structure in which a Trump-controlled entity receives 75% of net token sale revenues after fees. The family initially held a significant stake (around 60%) in the holding entity. The WLFI token reached a peak of approximately $0.46 in September 2025 but has since plummeted more than 80%, hitting all-time lows around $0.08 recently. Main Investor Criticisms The current controversy began with accusations from Justin Sun, founder of Tron and one of the largest investors (with a reported $75 million commitment). On X, Sun denounced a secretly embedded “backdoor blacklisting function” in the WLFI token smart contract. According to him, this feature gives the team unilateral power to freeze, restrict, or confiscate holders’ tokens without notice or recourse. He claims his own tokens have been locked since September 2025. Other complaints include:

A controversial $75 million loan in stablecoins (much of it in the project’s own USD1) taken by the WLFI treasury, collateralized by 5 billion WLFI tokens on the Dolomite platform (co-founded by the project’s CTO). This allegedly blocked withdrawals for other users and exposed the platform to liquidation risks. The fact that the Trump family and insiders have been able to cash out tens of millions of dollars through sales or transfers (including to Coinbase), while retail investors remain largely locked up with 80% of their tokens still vesting. Concerns over governance and true decentralization, with the project perceived as heavily centralized in favor of the founders.

WLFI has dismissed the accusations as “FUD” (fear, uncertainty, doubt) and stated it is prepared to take legal action. Vesting Adjustments: Solution or New Source of Tension? Under pressure, the team submitted a governance proposal to restructure the vesting of over 62 billion WLFI tokens (out of a total supply of 100 billion). Key points include:

For early supporters (approximately 17 billion tokens): 2-year cliff (complete lock-up), followed by 2 years of linear vesting. For founders, team, advisors, and partners (approximately 45.2 billion tokens): Burn of 4.5 billion tokens (10%), then 2-year cliff + 3 years of vesting. Holders who reject the new terms risk having their tokens locked indefinitely.

The proposal aims to ease frustrations by finally providing a path to liquidity while controlling circulating supply inflation. However, it has sparked new criticism: some view it as a form of “rug pull” or coercion, with lock-ups extending until 2028–2029. Justin Sun and others have called the plan “absurd” and “tyrannical.” Some investors are even threatening class-action lawsuits. Broader Implications This scandal highlights the tensions between politically backed crypto projects and the community’s expectations for transparency and decentralization. It also raises questions about potential conflicts of interest, especially with foreign investments (including a reported 49% stake linked to a member of the UAE royal family). The White House has stated that Donald Trump is not involved in the day-to-day management of the project. The WLFI token remains highly volatile, and the outcome of the governance vote will be decisive for the project’s future. Conclusion World Liberty Financial is navigating between DeFi ambition and accusations of opaque practices. While the Trump family has already secured substantial gains, retail investors are still waiting for real liquidity and fairer governance. The evolution of this situation could significantly impact how celebrity-backed crypto projects are perceived in the United States. Stay tuned for the governance vote results and any potential legal developments.