Tron founder Justin Sun remains blacklisted by World Liberty Financial (WLFI), as pointed out by a recent tweet from Bubblemaps. The blockchain analytics firm noted that Sun’s locked WLFI tokens have lost around $60 million in value in the past three months.

WLFI Launch Controversy

Bubblemaps’ latest comment has renewed attention on the issues surrounding WLFI’s launch last September. The project faced confusion, disputes regarding supply, and claims of insider manipulation that heavily impacted retail investors. Central to this issue was Justin Sun, whose wallets were frozen shortly after the launch due to what WLFI termed as unusual on-chain activities suggesting insider selling.

When WLFI launched, token distribution quickly became contentious. While the community allocation was initially expected to be 5%, only 4% of tokens actually went live because not all users utilized the mandatory lockbox mechanism. Likewise, allocations for liquidity and marketing, originally reported at 1.6%, were later adjusted to about 2.8% of total supply. This pushed the effective circulating supply closer to 6.8%.

Additional large allocations, including a 10% ecosystem fund and a 7.8% tranche for Alt5 Sigma, were released but subjected to no vesting, leading analysts to suggest that this created a misleading picture of available supply, complicating price discovery.

WLFI-Justin Sun Fallout

Sun possessed roughly 3% of WLFI’s total supply, of which only 20% was unlocked at launch. He publicly asserted that he would not sell his tokens and that he supported WLFI’s long-term goals. Despite this, WLFI debuted at $0.20 with a market cap of about $1 billion, while trading volumes surged into the billions. The token’s price subsequently dropped steadily, with on-chain analysts indicating that the price movements seemed more mechanical than organic.

According to Quinten Francois, co-founder of WeRate, part of the volatility may have originated from exchanges unloading liquidity allocations, while Sun was reportedly involved in activities linked to HTX, offering users high yields for WLFI deposits. Blockchain analysts reported that around $9 million worth of WLFI was transferred early on from wallets associated with Sun via HTX and Binance. Following these transactions, WLFI froze Sun’s wallet using its guardianSetBlacklistStatus function.

The freeze has incited a debate within the community. While some view it as a protective measure against potential future misconduct, Sun has vocally requested that his tokens be unfrozen, arguing that he deserves the same rights as other initial investors.