A public disagreement between Justin Sun, the founder of Tron, and WLFI, a crypto project linked to Trump, escalated on Wednesday after Sun publicly denounced a new governance proposal as 'one of the most absurd governance scams' he has encountered. In a detailed post, Sun accused the project of devising a vote that penalizes dissenters, with token holders who oppose the proposal facing the risk of having their tokens locked up indefinitely. He also alleged that he and other significant holders had been barred from participating in the process, claiming that tokens representing about 4% of the voting power under his control had been frozen. Sun questioned the legitimacy of the vote, arguing that control over 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.
'This proposal is not about governance,' Sun stated. 'It is an exercise of power by a select few who are carefully orchestrating a further consolidation of power and expropriation of property.' The criticism revolves around WLFI's new proposal, which would overhaul token lockups across the ecosystem.
Over 62 billion WLFI tokens would be subject to new terms, including multi-year lockups and vesting schedules. Under the plan, tokens held by insiders, such as team members, advisors, and partners, would face a two-year lockup followed by a three-year gradual release, alongside a 10% token burn upon opting in. Early supporters would face slightly shorter vesting terms but no burn. In total, up to 4.5 billion tokens could be 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. Simon Dedic, the founder of Moonrock Capital, stated that early investors had effectively been 'rugged.' 'All the early investors in $WLFI who thought they had solid profits just got rugged by the Trump family themselves,' Dedic wrote, adding that the move seemed to give the project another chance to extract value from investors. He also criticized what he described as 'blatant misconduct' with little effort to conceal it.
A spokesperson for World Liberty Financial told CoinDesk that the proposal 'was designed to further align all participants in the WLFI ecosystem for the long term,' aiming to 'optimally ensure long-term participation in our ecosystem and help maintain 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, stating it had 'contracts' and 'evidence' after Sun accused the team of exploiting users through DeFi transactions. The dispute has been escalating for months.
In September, WLFI blacklisted a blockchain address linked to Sun that held about $107 million worth of its governance tokens at the time. This marked a sharp reversal from late 2024, when Sun was a key backer, investing $30 million in WLFI tokens and taking on an advisory role to support the project. Tensions intensified after WLFI deposited 5 billion of its own tokens into the lending protocol Dolomite, where one of its advisers is a co-founder, and borrowed roughly $75 million in stablecoins.
The tokens fell 12% to a record low the next day, after which Sun publicly accused the project of treating users as 'personal ATMs,' triggering the latest legal threats.