Trump family crypto venture World Liberty Financial Inc. is facing an investor revolt led by billionaire Tron founder Justin Sun, one of the project’s earliest and largest backers.
The controversy arose after WLFI took out a $75 million loan backed by three billion of its own WLFI governance tokens, shortly before a large block of tokens is due to be unlocked for sale on the open market — something that usually drives a token’s price down as holders are finally allowed to sell.
WLFI issues the USD1 stablecoin, which has a market cap of just over $4 billion.
The problem with the loan, critics say, is that it could let World Liberty extract cash before that token unlock, flooding the market with WLFI and driving down prices before investors can cash out. Critics note that if the WLFI price drops far enough, the loan could be liquidated, dumping the WLFI onto the market.
The price of WLFI dropped nearly 50% following the first token unlock in 2025, and this weekend reached a new low below $0.08. It launched at $0.23 on Sept. 1 2025.
World Liberty spokesman David Wachsman denied the allegations, telling Bloomberg that it has already paid back $25 million of the loan. He added that it is “false” to say that it is exiting its position, adding “we are doubling down based on our roadmap.”
The company said in an April 9 X post that “even if markets moved dramatically against us, we’d simply supply more collateral.”
The $75 million loan took up almost 100% of lending platform Dolomite’s capacity, effectively locking others out of borrowing against their WLFI.
WLFI’s first supporter
Sun was WLFI’s first major supporter, making a large buy that effectively kick-started the project when it was floundering at launch
Sun accused WLFI of treating “the crypto community as a personal ATM” in an X post on Sunday. He also stormed against its 2025 decision to blacklist his tokens, preventing him from selling them.
While noting that he has “always been an ardent supporter of President Trump and his crypto friendly policy,” Sun said “what was never disclosed — to me or to any investor — is that World Liberty embedded a backdoor blacklisting function in the smart contract used to deploy WLFI tokens” giving it the “unilateral power to freeze, restrict, and effectively confiscate the property rights of any token holder, without notice, without cause, and without recourse.”
WLFI responded with an X post of its own, saying “We have the contracts. We have the evidence. We have the truth. See you in court pal.”
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