Justin Sun Exposes Red Flags in Trump’s WLFI Amid $75M Loan Controversy

Tron founder Justin Sun has publicly accused World Liberty Financial (WLFI), a crypto venture with ties to Donald Trump. He alleged that the team installed hidden controls in its token infrastructure.

Justin Sun Accuses Trump’s WLFI of Hidden Backdoor

In an in-depth post on X, Sun indicated that he was an early supporter of the platform because of its declared vision of decentralized finance. Yet, he asserted that there was a major attribute concealed to the investors. “What was never disclosed… is that World Liberty embedded a backdoor blacklisting function in the smart contract,” Justin Sun claimed.

He alleged that the feature enabled the team to “freeze, restrict, and effectively confiscate” user assets at will. He also described the design as “the opposite of decentralization,” calling it “a trap door marketed as an open door.” Sun also explained that he was a victim himself, stating that his wallet had been blacklisted in 2025, and he was the first and the largest victim.

Justin Sun’s charges follow the wider criticism WLFI faced after major stablecoin borrowing. On-chain data indicates that the project committed approximately 5 billion of its own tokens to stablecoin loans of approximately $75 million. Critics claim that the model is similar to circular financing with internally issued assets serving as collateral to obtain external liquidity.

Inside WLFI’s $75M Borrowing Controversy

According to blockchain analytics, WLFI placed $14 million of its in-house stablecoin USD1 to borrow $11.4 million USDC in February. The team subsequently deposited the money on Coinbase Prime. Other transactions were a direct transfer of $12.5 million USD1 into the same platform bypassing the lending mechanisms.

Arkham Intelligence data reveal that during the following weeks, WLFI deposited close to 2 billion tokens into the Dolomite protocol and borrowed more than 31 million stablecoins. The project represents approximately 55% or $458.9 million of the total liquidity of Dolomite, which raises questions regarding its dominance.

Hence, Justin Sun, who had initially pumped in $30 million and subsequently added a position of $75 million, fumed. He concluded, “The WLFI team’s actions erode trust in the project.” He then urged the platform to “unlock the tokens and uphold transparency.”

Moreover, the reaction in the market has not been good. The WLFI price fell to below $0.08, and has been losing more than 21% in the last one month. Liquidity strains are also arising with the USD1 pool utilization approaching 93% creating withdrawal concerns. Also, in April’s first week, the team moved 3 billion WLFI tokens, which added to the controversial topic.