The WLFI price droped 50% after Justin Sun’s wallet was blacklisted by World Liberty Financial. This has created debates about decentralisation and governance.
World Liberty Financial’s WLFI price has dropped so far by 50%, after the project blacklisted a wallet linked to TRON founder Justin Sun.
The move froze more than $100 million worth of his holdings and triggered heated discussions about decentralisation and market integrity.
WLFI, which launched on September 1, has already plunged from an opening price of $0.40 to under $0.20 in a matter of days.
Blockchain trackers first flagged suspicious transfers from wallets connected to Sun.
Records showed that 50 million WLFI tokens, worth about $9 million, were moved to a new address. Analysts indicated that many of these tokens were routed toward HTX, an exchange where Sun is an executive.
On-chain data from Arkham later confirmed that the frozen address belonged to Sun.
This action led to the locking of 540 million $WLFI and an additional 2.4 billion locked tokens tied to him. At launch, Sun invested $75 million in the project and secured nearly 3 billion WLFI tokens, becoming one of its largest backers.
Justin Sun denied any wrongdoing. He explained that his transfers were minor tests and part of a routine wallet management move. According to him, no buying or selling took place, and the amounts moved were too small to affect the WLFI price.
Despite his defence, the timing of the transfers ahead of the price decline was more than enough to speculate on.
Critics pointed to more than 5 million WLFI deposited to HTX within two days and a separate 60 million WLFI transfer to a Binance wallet. These transactions, they argued, conflicted with the project’s stated vesting schedule.
Sun later issued a statement and called the blacklist both “unreasonable” and a violation of investor rights. He argued that tokens should remain “sacred and inviolable” in any blockchain space.
After the freeze, WLFI rebounded slightly from its decline. The token has risen 4% in the past 24 hours, after climbing from a low of $0.163 to around $0.187 at press time. This recovery added roughly $500 million to its market capitalisation, which now stands at $4.6 billion.
Market data from CoinGlass shows that traders lost nearly $17 million due to WLFI’s volatile swings. Open interest volume also surged by 50% to a high of $7.2 billion as speculative activity grew around the token.
The decision to freeze Sun’s wallet split the WLFI community. Supporters argued that the freezing prevented possible manipulation by one of the largest investors.
Sun held nearly 20% of the circulating supply, and his actions were likely to strongly influence market sentiment.
Opponents countered that the freeze undermined the main principles of decentralisation. They noted that giving project operators the power to blacklist accounts is a contradiction of the project’s decentralisation claims.
The controversy showed stronger, broader issues with governance.
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