A public feud between Tron founder Justin Sun and WLFI, a crypto project linked to the Trump family, has escalated after Sun sharply condemned a new governance proposal, labeling it a 'blatant scam'. Sun accused WLFI of designing a voting system that penalizes token holders who oppose the proposal, with those voting against it risking indefinite token lockups.
He also alleged that his own tokens, representing approximately 4% of the voting power, had been frozen, effectively excluding him from the process. Sun questioned the legitimacy of the vote, suggesting that control of the protocol rests with anonymous wallet addresses, including a multisignature setup that can override outcomes and a separate account with the power to blacklist users. The proposal in question would introduce new token lockup terms across the WLFI ecosystem, affecting over 62 billion tokens. Insiders, including team members and partners, would face a two-year lockup period followed by a three-year gradual release, alongside a 10% token burn for those who opt-in.
Holders who decline the new terms would remain locked indefinitely. Sun's criticism was echoed by Simon Dedic, founder of Moonrock Capital, who stated that early investors had been 'rugged' by the Trump family. A spokesperson for World Liberty Financial defended the proposal, stating it was designed to 'align all participants in the WLFI ecosystem for the long-run' and ensure 'healthy market supply'.
The backlash marks the latest development in the deteriorating relationship between Sun and WLFI, which has been escalating over the past few months. Earlier this week, WLFI threatened legal action against Sun, who had accused the project of exploiting users through DeFi transactions. The dispute began in September when WLFI blacklisted a blockchain address linked to Sun, holding approximately $107 million worth of governance tokens at the time.
Tensions intensified after WLFI deposited 5 billion of its tokens into a lending protocol and borrowed $75 million in stablecoins, triggering a 12% decline in token value and prompting Sun to publicly accuse the project of treating users as 'personal ATMs'.