Key Takeaways
- Tron founder Justin Sun labeled WLFI’s governance proposal as “one of the most absurd governance scams” in cryptocurrency
- More than 62 billion WLFI tokens would be locked for up to four years under the proposal, with indefinite freezes for those rejecting the terms
- Sun alleges his 4% ownership position has been frozen, preventing him from participating in governance votes
- Simon Dedic from Moonrock Capital accused the Trump family of executing a “rug pull” on early backers
- World Liberty Financial defends the measure as necessary for “long-term participation” and ecosystem health
World Liberty Financial, Donald Trump’s cryptocurrency initiative, is facing intense scrutiny following the unveiling of a governance proposal that would impose lengthy token lockups on early participants — with permanent freezes for those who decline.
Published on WLFI’s governance platform this Wednesday, the controversial proposal targets over 62 billion WLFI tokens with restrictive new vesting schedules. Team members, advisors, and strategic partners would face an initial two-year complete lockup, followed by an additional three-year gradual token release. Early backers receive marginally better terms but still confront years-long delays before gaining access to their holdings.
Those refusing to accept these revised conditions would see their tokens frozen permanently, with no guaranteed mechanism for future access.
The plan also includes provisions to burn up to 4.5 billion tokens, while insiders agreeing to the new terms would forfeit 10% of their holdings.
Justin Sun, founder of Tron and among WLFI’s largest stakeholders, condemned the proposal harshly. In a post on X, Sun described it as “one of the most absurd governance scams I have ever seen.”
Sun reports holding approximately 4% of World Liberty tokens, but alleges these holdings are currently frozen. This freeze, he contends, has effectively disenfranchised him from the governance process.
He further questioned the legitimacy of protocol control, pointing to anonymous wallet addresses — including a multisignature wallet capable of overriding community votes and another account with user blacklisting capabilities — that wield disproportionate influence.
“This proposal is not governance,” Sun stated. “It is an exercise of power by the selected few.”
Mounting Opposition from the Investment Community
Sun’s criticism echoed concerns from other prominent figures. Simon Dedic, who founded Moonrock Capital, declared that early investors had been subjected to a “rug pull” orchestrated by the Trump family.
In his X commentary, Dedic suggested the maneuver seemed designed to give the project “another shot at squeezing the same lemon,” with timing that suspiciously aligns with the duration of Donald Trump’s current presidential term.
Dedic also condemned what he characterized as “blatant misconduct” conducted with minimal attempt at concealment.
Escalating Tensions With Deep Roots
The conflict between Sun and WLFI traces back to September, when the project blacklisted a blockchain wallet connected to Sun containing approximately $107 million worth of governance tokens.
This represented a dramatic shift from late 2024, when Sun contributed $30 million to WLFI and accepted an advisory position with the project.
Relations deteriorated further when WLFI deposited 5 billion of its native tokens into Dolomite, a lending platform co-created by one of its own advisers, subsequently borrowing roughly $75 million in stablecoins. The token price plummeted 12% to an all-time low within 24 hours.
Sun publicly criticized the project for using participants as “personal ATMs.” World Liberty Financial countered by threatening 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 for this contentious proposal is scheduled to commence shortly and will remain open for seven days. The WLFI token currently trades at approximately 8 cents, representing a decline exceeding 40% year-to-date and more than 75% below its peak of 33 cents.
