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Apr 15, 2026

Investor Justin Sun alleges Trump‑linked crypto firm secretly froze WLFI tokens

AI Summary
Crypto entrepreneur Justin Sun, the largest public investor in World Liberty Financial – the Trump family’s flagship crypto venture – claimed the firm installed a hidden mechanism that can freeze any holder’s WLFI tokens. Sun says his own holdings were blacklisted in September, prompting a public dispute and a threat of legal action, while the company maintains its right to block illicit activity under its risk disclosures.

The biggest public backer of World Liberty Financial, the crypto venture co‑founded by the Trump family, has publicly accused the firm of embedding a covert "backdoor blacklisting" feature that allows it to freeze token holdings at will.

On Sunday, blockchain entrepreneur Justin Sun posted on X, alleging that World Liberty’s smart contracts for the WLFI token contain a tool that can unilaterally freeze, restrict, or confiscate any user’s assets without cause or recourse. Sun did not provide evidence, but said his own wallet was locked in September, making him the "first and single largest victim" of the alleged mechanism.

World Liberty responded on X, stating, "We have the contracts. We have the evidence. We have the truth. See you in court, pal," and directed observers to its own posts for clarification. The company’s official risk disclosures do note that it may block or freeze addresses deemed linked to illegal activity or terms violations – a practice also employed by other crypto issuers such as Tether.

Sun, who invested tens of millions of dollars in WLFI and later increased his stake to at least $75 million according to his 2025 posts, has not shared the purported blockchain records that supposedly show his wallet being blacklisted by a single administrative account.

World Liberty, launched in 2024, claimed it would empower small investors through a decentralized‑finance app that has yet to launch. Reuters analysis indicated the venture generated **more than $460 million** for the Trump family in the first half of 2025.

In March, the U.S. Securities and Exchange Commission settled a 2023 lawsuit against Sun for $10 million, alleging fraud and the sale of unregistered crypto securities. Sun made no admission of wrongdoing.

The dispute highlights the murky regulatory environment for crypto in the United States, where the SEC has limited jurisdiction and has declined to comment on the legality of token‑freezing practices.