A heated public dispute between Justin Sun, founder of Tron, and WLFI, a crypto project linked to the Trump family, has intensified after Sun vehemently denounced a newly introduced governance proposal. Sun labeled the proposal as 'one of the most absurd governance scams' he has encountered, sparking a backlash against the project.
According to Sun, the proposal is designed to penalize token holders who vote against it, risking the indefinite lockup of their tokens. Furthermore, Sun alleged that he and other major token holders were excluded from the voting process, with approximately 4% of the voting power under his control being frozen.
The Tron founder questioned the legitimacy of the vote, suggesting that control over the protocol lies with anonymous wallet addresses, including a multisignature setup capable of overriding outcomes and a separate account with the power to blacklist users. Sun stated, 'This proposal is not governance; it is an exercise of power by a select few who are carefully engineering a further power consolidation and property expropriation operation.' The controversy surrounds WLFI's proposal to overhaul token lockups across the ecosystem, affecting over 62 billion WLFI tokens. The plan includes multi-year lockups and vesting schedules for tokens held by insiders, such as team members, advisors, and partners, with a two-year lockup followed by a three-year gradual release and 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. Simon Dedic, founder of Moonrock Capital, also criticized the move, stating that early investors had been 'rugged' by the Trump family.
A World Liberty Financial spokesperson countered 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 healthy market supply.' The backlash marks the latest escalation in the feud between Sun and WLFI, which has been building for months. Earlier this week, WLFI threatened legal action against Sun, who had accused the team of exploiting users through DeFi transactions. The dispute has its roots in September, when WLFI blacklisted a blockchain address linked to Sun that held approximately $107 million worth of its governance tokens at the time.
This move 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, prompting Sun to publicly accuse the project of treating users as 'personal ATMs,' which triggered the latest legal threats.