WLFI Freeze Authority Dispute Raises Transparency Questions
Justin Sun urged the Trump linked World Liberty Financial to disclose who controls the guardian externally owned account (EOA) and multisignature wallets governing its smart contracts. In a recent statement shared on X, Sun alleged that a single guardian EOA tied to WLFI’s multisig appeared to be the sole owner of a second guardian safe, potentially granting one individual unilateral authority to freeze token holders. WLFI has not publicly responded to the technical details of these claims.
The dispute follows the September 2025 blacklisting of Sun’s WLFI wallet address after blockchain monitoring platforms flagged a transfer valued at roughly $9 million. Sun said his presale tokens were frozen without proper justification and called on the project to unlock his investment. In response, WLFI accused Sun of spreading baseless allegations and warned of possible legal action.
Governance Concentration and Collateral Moves Add Market Pressure
Concerns about governance intensified after a March vote showed that 76% of total voting power originated from just ten wallets, highlighting potential centralization risks. At the same time, on-chain data flagged by Arkham revealed that WLFI-linked wallets deposited about 5 billion WLFI tokens as collateral on Dolomite, a platform linked to WLFI chief technology officer Corey Caplan.
These deposits enabled borrowing of approximately $75 million in stablecoins, including USD1 and USDC, with more than $40 million transferred to Coinbase Prime. Several decentralized finance analysts warned that lenders could face risk if WLFI’s token price declines toward liquidation thresholds. WLFI acknowledged the lending position and maintained that the token remains above liquidation levels, though its price recently dropped to around $0.077, reflecting growing investor concerns over governance transparency and treasury management.
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