Justin Sun has seen the value of his frozen holdings in World Liberty Financial decline by more than $11 million after the platform’s WLFI token dropped sharply. The token fell 15% within 24 hours and has declined over 74% since becoming tradeable last year.
Sun initially invested $30 million into the project in late 2024 before accumulating holdings valued at approximately $75 million. He also committed $100 million to the TRUMP memecoin linked to Donald Trump. However, his WLFI wallet was blacklisted after transferring roughly $9 million worth of tokens, leaving about 545 million WLFI frozen and unable to be sold.
According to data from Bubblemaps, the frozen tokens are currently valued near $45 million, representing losses exceeding $80 million from earlier valuations.
Borrowing Activity Raises Collateral Concerns
Concerns intensified after World Liberty deposited billions of WLFI tokens as collateral on the Dolomite platform to borrow tens of millions of dollars in stablecoins. The connection drew attention because Corey Caplan also serves as an advisor to World Liberty Financial.
Critics warned that a steep WLFI price drop could create bad debt risks for lenders if collateral values fall significantly.
Project Rejects Liquidation Risk Claims
World Liberty dismissed liquidation concerns, describing them as “FUD” and insisting its collateral position remains secure. The team stated it could supply additional collateral if market conditions deteriorate. It also argued that acting as an “anchor borrower” on Dolomite supports higher yields for other users while reinforcing confidence in the WLFI ecosystem despite the token’s ongoing price decline.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.