Donald Trump-linked DeFi project WLFI loses Justin Sun after $75M move

Justin Sun’s criticism and split from WLFI

At the start of last year, Justin Sun had provided a much-needed boost to WLFI by purchasing $30 million worth of tokens during its launch, hoping to offset the project’s initial lack of attention. However, tensions mounted over time due to the way WLFI’s team charged fees to investors, prompting Sun’s exit.

Taking to X (formerly Twitter), Sun alleged that the WLFI team was treating its users like a “personal bank,” unfairly profiting from them. His comments came shortly after World Liberty Financial borrowed roughly $75 million in stablecoins from the DeFi platform Dolomite, putting up 5 billion WLFI tokens as collateral.

“It is unacceptable for the WLFI team to collect commissions from users’ liquidity and treat the crypto community as their personal ATM,” explained Justin Sun in his public statement.

This move tied most of Dolomite’s liquidity to WLFI collateral. In the early hours after the transaction, usage in the platform’s USD1 pool hit 100%, temporarily blocking investors from accessing their funds. By the week’s end, usage had retreated to 82%, with $158 million borrowed out of a total supply of $193 million.

Governance disputes and token wallet controversy

The controversy deepened due to the dual role played by Dolomite’s co-founder Corey Caplan, who also serves as an advisor for WLFI. On-chain data suggested Caplan was effectively acting as a de facto CTO. Dolomite responded to the situation by raising the supply cap for WLFI investments on its platform to 5.1 billion tokens.

In September 2023, WLFI’s team froze 595 million tokens found in Justin Sun’s wallet. At the time, these tokens, which belonged to Sun—founder of Tron—were worth approximately $107 million. The company explained that the freeze targeted 272 wallets allegedly involved in phishing attacks, stating the action aimed to protect users.

Justin Sun characterized this intervention as the “original sin” of the company. He asserted that blacklisting a personal wallet contradicts basic investor rights and runs contrary to the principles of justice within the blockchain industry. Sun further accused WLFI of unfair and opaque voting processes, claiming major shareholders were left uninformed about critical decisions whose outcomes were predetermined.

In his remarks, Sun directed his criticism solely at WLFI’s management team. He reiterated his ongoing support for Donald Trump’s pro-crypto stance but made it clear that his objections focused on “bad actors within WLFI.”

WLFI co-founder Zak Folkman has so far declined to comment, and no official statement has come from the company’s side regarding the recent developments.

According to the latest market data, WLFI tokens are now trading at $0.079—a weekly drop of 18% in value.