World Liberty Financials (WLFI) froze Tron founder Justin Sun's wallet containing 540 million unlocked WLFI tokens and 2.4 billion locked tokens following a governance vote. The action was taken after community members and analysts observed unusual trading patterns shortly after WLFI's launch on September 1, when the token debuted at $0.20 with a near $1 billion market cap.
Investigators tracked wallets linked to Sun moving funds across Ethereum and Binance Smart Chain, borrowing stablecoins and executing repeated sells that contributed to WLFI's price decline. Allegations surfaced that Sun may have used his exchange, HTX, to offer 20% returns on WLFI deposits, potentially using user funds to indirectly sell his locked tokens. This mirrors past controversies, including SEC accusations of fake TRX trades in 2018-2020 and HTX reserve reporting issues in 2024.
Sun denied wrongdoing, claiming he was an early investor and that the freeze violated blockchain principles of fairness and property rights. He called for the tokens to be unlocked and pledged to buy an additional $10 million of WLFI to restore confidence. Despite his appeals, the freeze remains in place, with no timeline for resolution.