In a groundbreaking revelation, prominent crypto entrepreneur Justin Sun has accused World Liberty Financial, the largest investor in Donald Trump’s crypto venture, of secretly implementing a tool that can freeze users’ cryptocurrency holdings unilaterally. In a series of posts on the social media platform X, Sun suggested that this mechanism, which he referred to as a “backdoor blacklisting function,” could affect any holder of WLFI tokens.
Sun claimed that this alleged feature granted World Liberty the ability to “freeze, restrict, and effectively confiscate the property rights” of token holders without any justification or opportunity for recourse. This alarming allegation raises significant questions about the autonomy and security of investments within the cryptocurrency space.
On social media, Sun positioned himself as the “first and single largest victim” of this purported tool, claiming that his WLFI holdings had been frozen in September. World Liberty, however, had previously defended its actions, stating that it did not engage in blacklisting practices unless responding to “malicious or high-risk activity” that posed threats to community members.
In his latest posts, Sun referenced blockchain records that he claimed indicated his digital wallet had been blacklisted by a single account presumed to have administrative power within World Liberty. He emphatically questioned, “Who is that person?” while offering no supporting documentation to substantiate his assertions.
World Liberty responded directly on X, stating, “We have the contracts. We have the evidence. We have the truth. See you in court pal.” A spokesperson for the firm reiterated their position by referring to the official account’s posts, yet did not provide additional details when contacted for comment. Similarly, Sun refrained from further elaboration, nor did a representative on his behalf make additional comments.
Founded as a joint venture by the Trump family, World Liberty has emerged as a significant player in the cryptocurrency market. The firm claimed that its upcoming decentralized finance application aims to empower small investors by allowing more control over financial flows, although the app has not yet been launched. According to a Reuters analysis, the firm generated over $460 million in income for the Trump family during the first half of 2025.
Sun’s involvement with World Liberty began in late 2024, when he became the largest known investor in the venture by investing tens of millions into the WLFI token. He later increased his investment to at least $75 million, describing it as a vote of confidence in what he labeled an “excellent project” by the Trump family. However, Sun recently faced legal challenges; in March, the Securities and Exchange Commission (SEC) settled a $10 million lawsuit against him for allegations of fraud and improper promotion of crypto securities, a charge he did not admit wrongdoing on.
World Liberty’s risk disclosures inform users that the company reserves the right to block and freeze wallet addresses and tokens it determines to be associated with illegal activities or violations of its terms. Other cryptocurrency firms, such as Tether, operate similar policies, freezing tokens in cases of suspected illegal usage or when requested by law enforcement.
Despite these actions being common in the industry, the SEC has offered little clarity on regulatory frameworks regarding such measures, leaving the cryptocurrency sector in a state of ambiguity. As the situation develops, the implications of such power dynamics within crypto investments remain to be seen.
