Justin Sun Blasts World Liberty Financial’s Token Lockup as ‘Governance Scam’

Key Takeaways

• Tron founder Justin Sun condemned WLFI’s governance proposal as an unprecedented governance manipulation scheme
• More than 62 billion WLFI tokens could be locked for four years or permanently for non-compliant holders
• Sun alleges his 4% ownership stake has been frozen, blocking his voting rights
• Simon Dedic of Moonrock Capital accused the Trump family of deceiving early backers
• World Liberty Financial defends the plan as ensuring long-term ecosystem alignment

World Liberty Financial, the cryptocurrency venture backed by Donald Trump, faces mounting criticism following the introduction of a governance measure that would lock early backers’ tokens for extended periods—potentially forever if they decline the terms.

According to a Wednesday posting on WLFI’s governance platform, the measure would subject over 62 billion WLFI tokens to strict lockup conditions. Core team members, strategic advisers, and affiliated partners would see their holdings locked for two years, followed by a three-year graduated release schedule. Early project supporters face somewhat reduced vesting periods but still confront years of waiting before token access.

Anyone declining these revised conditions would face permanent token freezing with no established mechanism for future access.

The framework also includes provisions for burning up to 4.5 billion tokens, with insiders accepting the terms facing a 10% reduction in their holdings.

Justin Sun, founder of Tron and among WLFI’s largest stakeholders, delivered scathing criticism of the framework. In an X post, Sun characterized it as “one of the most absurd governance scams I have ever seen.”

Sun reports holding approximately 4% of World Liberty’s tokens, though he states these holdings are presently frozen. According to Sun, this freeze has effectively disenfranchised him from participating in the governance decision.

He further questioned the actual power structure within the protocol. Sun identified unnamed wallet addresses—including a multi-signature wallet with veto authority and another account capable of blacklisting participants—as wielding genuine control over protocol decisions.

“This proposal is not governance,” Sun declared. “It is an exercise of power by the selected few.”

Growing Opposition From Investors

Sun’s criticism was echoed by other prominent figures. Simon Dedic, who founded Moonrock Capital, claimed early participants had been deceived by the Trump family.

In an X post, Dedic suggested the maneuver appeared designed to give the project “another shot at squeezing the same lemon,” with timing that coincidentally aligns with the duration of Donald Trump’s presidency.

Dedic further condemned what he characterized as “blatant misconduct” executed with minimal attempt at concealment.

Escalating Conflict Dating Back Months

The friction between Sun and WLFI originated in September, when the platform blacklisted a blockchain address connected to Sun containing approximately $107 million worth of governance tokens.

This represented a dramatic shift from late 2024, when Sun committed $30 million to WLFI and accepted an advisory position.

The relationship deteriorated further after WLFI deposited 5 billion of its native tokens into Dolomite, a lending platform co-created by one of its advisers, borrowing roughly $75 million in stablecoins. The token’s value dropped 12% to an all-time low within 24 hours.

Sun openly criticized the project for exploiting users as “personal ATMs.” World Liberty Financial countered with warnings of potential litigation.

A World Liberty Financial representative told CoinDesk the proposal “aims to optimally ensure long-term participation in our ecosystem and help ensure healthy market supply.”

The voting period is scheduled to commence shortly and will remain open for seven days. WLFI tokens currently trade around 8 cents, representing a decline exceeding 40% year-to-date and more than 75% below the peak price of 33 cents.