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The launch of the World Liberty Financial platform’s native token, WLFI, was anticipated as a significant event in the cryptocurrency market, especially with backing from the Trump family.
However, just a day after its debut, the token’s price plummeted, sparking intense speculation regarding its major investors, particularly Justin Sun, the founder of the Tron blockchain.
Market expert Quinten Francois provided insights into the WLFI launch, which initially priced at $0.20, reaching a market capitalization of $1 billion. Despite the excitement surrounding the launch, which generated billions in trading volume, the token’s value continued to decline.
Interestingly, this downturn occurred even as the community seemed to hold onto their tokens rather than sell them. Francois speculated that exchanges might have offloaded part of their holdings, estimated at 2.8%.
Allegations have surfaced that Justin Sun engaged in dubious tactics by channeling WLFI through his exchange, HTX. He reportedly offered users a 20% annual percentage yield (APY) for depositing WLFI, allowing him to offload a significant portion of his own holdings under the guise of user staking.
Allegations suggest that this maneuver not only enabled him to profit from the situation but also that he intended to cover any withdrawals or sell-offs with his own tokens, further complicating retail investors’ returns.
As Bitcoinist reported on Thursday, Sun’s alleged manipulation led to the freezing of his wallet address. As a result, there is growing concern among experts that WLFI could ultimately face a trajectory toward zero.
In a recent social media post, user OxPunisher outlined the patterns of manipulation associated with Sun, referencing his history of questionable trades between 2018 and 2020, which reportedly resulted in $31 million in illicit profits.
This ongoing saga continued into 2024, when Sun withdrew $732 million worth of Bitcoin from USDD collateral, and in late 2024, he invested $30 million into WLFI just as the SEC paused his case, further raising alarms among investors.
The narrative surrounding WLFI appears precarious at best. The expert asserts that without Justin Sun’s liquidity strategies the token’s value could collapse.
Moreover, without the backing of high-profile figures like President Donald Trump, the narrative that initially attracted investors may lose its momentum entirely.
This situation has led OxPunisher to believe that this situation can result in panic selling and a shift toward safer investment options by the platform’s investors, which could further increase the WLFI’s sell-off and downtrend seen in the past few days.
Featured image from DALL-E, chart from TradingView.com
