WLFI Freeze haunts Justin Sun three months after problematic token launch

Despite public commitments and buyback promises, Justin Sun remains locked out.

Tron founder Justin Sun is still blacklisted by World Liberty Financial (WLFI), according to a recent tweet from Bubblemaps.

The blockchain analytics platform said Sun’s locked WLFI tokens have lost around $60 million in value over the past three months.

WLFI launches controversy

The last comment from Bubblemaps has renewed highlighting the controversy surrounding WLFI’s launch in September, when the project was hit by confusion, supply disputes and insider manipulation allegations that mainly affected retail investors. At the center of the dispute was Justin Sun, whose wallet was frozen by WLFI shortly after launch after what the team described as unusual activity on the chain that raised concerns about insider selling.

When WLFI launched, token distribution immediately became a point of contention. Initially, the community allocation was expected to be 5%, but only 4% of the tokens actually went live because not all users used the required lockbox mechanism. At the same time, liquidity and marketing allocations, originally reported at 1.6%, were later clarified to total approximately 2.8% of supply. This brought the effective circulating supply closer to 6.8%.

Other large allocations, including a 10% ecosystem fund and a 7.8% tranche reserved for Alt5 Sigma, were released but were not subject to vesting. Some analysts said this created an illusion of available supply, making price discovery difficult.

WLFI – Justin Sun Fallout

Sun owned about 3% of WLFI’s total offering, of which only 20% was unlocked at launch. Sun publicly stated that he would not sell his tokens and said he supported WLFI’s long-term vision. Despite this, WLFI debuted at $0.20 with a market cap of around $1 billion, while trading volumes were in the billions. The token’s price then fell steadily, with on-chain analysts noting that the price movements seemed mechanical rather than organic.

According to WeRate co-founder Quinten Francois, some of the volatility may come from exchanges offloading liquidity allocations, while Sun was reportedly involved in activities related to HTX, including offering high returns to users to deposit WLFI. Blockchain experts reported that early on, around $9 million worth of WLFI was moved from addresses linked to Sun through HTX and Binance. After these transfers, WLFI froze Sun’s wallet using the “guardianSetBlacklistStatus” function.

You might also like:

The freeze sparked debate within the community. Some praised the move as protection against possible repeat behavior. However, Sun publicly called for its tokens to be unfrozen. He called the action unreasonable and said he deserved the same rights as other early investors.