A public spat between Tron founder Justin Sun and the Trump-linked cryptocurrency project WLFI escalated on Wednesday, as Sun vehemently criticized a new governance proposal, labeling it 'one of the most absurd governance scams' he has encountered. In a detailed post on X, Sun alleged that the project designed a vote that penalizes token holders who oppose the proposal, risking indefinite token lockups.
He also claimed that he and other major holders had been excluded from the process, stating that tokens representing approximately 4% of the voting power under his control had been frozen. Sun questioned the legitimacy of the vote, suggesting that control over the protocol lies with anonymous wallet addresses, including a multisignature setup that can override outcomes and a separate account with the power to blacklist users. 'This proposal is not governance,' Sun stated in the post. 'It is an exercise of power by a select few who are carefully engineering a further power consolidation and property expropriation operation.' The criticism revolves around WLFI's new proposal, which would overhaul token lockups across the ecosystem, affecting over 62 billion WLFI tokens.
Under the plan, tokens held by insiders, such as team members, advisors, and partners, would be subject to a two-year lockup followed by a three-year gradual release, accompanied by a 10% token burn upon opting in. Early supporters would face slightly shorter vesting terms but no burn, with up to 4.5 billion tokens potentially being permanently destroyed. Token holders who do not accept the new terms would remain locked indefinitely, according to the proposal. Sun was not alone in his criticism, as Simon Dedic, founder of Moonrock Capital, stated that early investors had been 'rugged.' 'All the $WLFI early investors who thought they were sitting on solid profits just got rugged, by the Trump family themselves,' Dedic wrote on X, adding that the move seemed to give the project another opportunity to extract value from investors.
He also condemned what he described as 'blatant misconduct' with little effort to conceal it. A World Liberty Financial spokesperson told CoinDesk that the proposal 'was designed to further align all participants in the WLFI ecosystem for the long-run,' aiming to 'optimally ensure long-term participation in our ecosystem and help ensure a healthy market supply.' The backlash marks the latest episode in the deteriorating relationship between Sun and the project. Earlier in the week, WLFI threatened legal action, claiming it had 'contracts' and 'evidence' after Sun accused the team of exploiting users through DeFi transactions.
The dispute has been escalating for months, with tensions intensifying after WLFI deposited 5 billion of its own tokens into the lending protocol Dolomite and borrowed roughly $75 million in stablecoins. The tokens fell 12% to a record low the next day, prompting Sun to publicly accuse the project of treating users as 'personal ATMs,' triggering the latest legal threats.