Justin Sun And WLFI Saga, What Really Happened?

Justin Sun’s wallet was frozen by World Liberty Financials after a governance vote locked 540 million unlocked WLFI tokens and 2.4 billion locked tokens.

The move followed claims that Sun used exchanges to sell tokens and drive down prices during the launch earlier this month.

WLFI Freeze and the Launch Timeline

World Liberty Financials froze Justin Sun’s address during the WLFI token launch this week.

The decision came through a governance vote after questions were raised about trading activity linked to Sun.

Records showed that 540 million WLFI tokens had been unlocked, while another 2.4 billion tokens were still locked.

At launch on September 1, WLFI opened at $0.20, giving it a market value close to $1 Billion.

Around 6.8% of the supply entered circulation, split between community distribution and marketing allocations. Sun holds about 3% of the supply.

Only 20% of his share was unlocked at the start. The rest was meant to remain locked for a longer period.

Community traders noticed that the price slipped soon after the launch despite high volume.

The trading pattern appeared unusual to observers who said the selling pressure did not match community activity.

Some suggested that larger wallets were behind the steady decline. Investigators said one of the wallets tied to Sun was moving funds across Ethereum and Binance Smart Chain.

The address was seen borrowing stablecoins, shifting assets back and forth, and then selling.

The repeated moves drew attention from analysts who believed it contributed to the fall in WLFI’s price.

Claims of Market Pressure and Past Cases

Allegations surfaced that Sun may have used his exchange, HTX, to access user tokens.

Reports said HTX offered 20% returns to those who deposited WLFI. This raised the possibility that user funds were being lent out while Sun managed to sell his holdings indirectly.

Critics argued that this created a way for him to offload locked tokens without waiting for the vesting schedule.

The claims stated that he used borrowed assets to fill gaps in user deposits and continued to move funds between chains to create trading activity.

Observers also compared the WLFI case to earlier events in Sun’s career.

Between 2018 and 2020, the United States Securities and Exchange Commission accused him of generating fake TRX trades.

In 2024, Sun was linked to reserve reporting issues at HTX, where collateral figures were questioned.

Analysts reviewing WLFI pointed to high funding rates, wash trading signs, and gaps between volume and price action.

More importantly, these signs suggested to some that trading was not organic. Governance members said these risks made freezing Sun’s wallet necessary to protect the project and its market.

Justin Sun Denies Wrongdoing and Calls for Fairness

In response, Justin Sun issued a public statement denying the allegations.

He said he was one of the early major investors in World Liberty Financials and that his tokens were bought the same way as others.

He argued that freezing his address went against the basic values of blockchain. Sun explained that he had always aimed to support the project with both funding and trust.

The Tron founder called for equal treatment of all investors and said tokens should be respected as private property.

He added that the strength of the project should rest on fairness, openness, and community support.

Sun urged the team to unlock his tokens and work together toward the project’s future.

According to him, unilateral freezes would hurt both investors and the wider ecosystem.

The freeze remained in place, leaving the next steps uncertain. Governance members did not confirm when or if the locked funds would be released.