Justin Sun accuses World Liberty Financial of embedding an undisclosed backdoor blacklist in its WLFI token smart contract.
Regulation & Gov ·
Justin Sun publicly alleged that World Liberty Financial embedded an undisclosed blacklist function in its WLFI token smart contract, granting the project unilateral power to freeze or seize token holders' assets without notice or justification. Sun claimed he was the first and largest victim, stating his own WLFI wallet was blacklisted in 2025 in violation of investor rights. He characterized the feature as the antithesis of decentralization and accused the team of extracting fees, concealing control mechanisms, and freezing funds without due process.
Sun contended that governance votes used to justify these actions were neither fair nor transparent, with critical information withheld from voters and participation restricted. He framed these votes as reflecting the designers' will rather than community intent. His statement follows a defamation lawsuit filed by World Liberty Financial, in which the project alleged Sun shorted WLFI and manipulated its price—claims Sun has characterized as retaliatory.
The dispute remains unresolved regarding whether the blacklist functionality was disclosed to early investors like Sun, what governance authority the team claims for its actions, and whether mediation efforts will succeed. Sun's allegations focus on the contract mechanics and procedural legitimacy, while the broader conflict involves competing claims of misconduct between the two parties.