Billionaire crypto investor Justin Sun is accusing World Liberty Financial, a cryptocurrency company linked to the Trump family, of misleading investors and operating a centralized system under the guise of decentralization.
Sun, one of the firm's largest backers, alleged on X that the company maintains the unilateral power to freeze user accounts. He claims his own account has been frozen since September, preventing him from selling holdings that have lost over $80 million in value.
“This is the opposite of decentralization. This is a trap door marketed as an open door,” Sun wrote. He further denounced what he called “ongoing token scandals” by the company’s leadership.
World Liberty Financial responded by accusing Sun of misconduct and threatening legal action. “We have the contracts. We have the evidence. We have the truth,” the company posted on X, adding, “See you in court pal.”
Financial instability and collateral risks
The dispute highlights growing scrutiny over the financial stability of the platform. Blockchain data from February shows World Liberty borrowed $75 million from the crypto group Dolomite, using 5% of the total WLFI token supply as collateral.
Analysts expressed concern that a continued decline in the WLFI token could trigger a liquidation event. The token has lost 74% of its value since August and is currently trading at approximately 8 cents.
“If you took this conduct and translated it to traditional markets, you would have some problems,” said Austin Campbell, a crypto consultant and instructor at New York University.
World Liberty denied the threat of liquidation, stating it would provide more collateral if prices dropped further. The company also noted it had already repaid $25 million of the loan.
World Liberty was co-founded by Donald Trump’s three sons, with Trump listed as a co-founder emeritus. While the White House maintains Trump is not involved in managing the family's crypto holdings, his 2025 financial disclosures show he earned more than $57 million in income from the company.
