A pool with 93% utilization and dwindling exit options is one of the more uncomfortable details buried in the growing controversy surrounding World Liberty Financial – the crypto project linked to US President Donald Trump that is now battling accusations of cheating from one of its biggest backers.
Sun claims his wallet was frozen first
Tron founder Justin Sun, who has invested more than $100 million in the project through two separate investments, went public with a pointed accusation: that WLFI has quietly built a backdoor into its smart contract infrastructure – a backdoor that allows the team to freeze, restrict, or block access to user funds without warning.
I have always been a strong supporter of President Trump and his pro-cryptocurrency policies.
As one of the early supporters who invested heavily in World Liberty Financial, I did so because I believed in the vision that was presented to the public: a decentralized financial platform that…
— HE Justin Sun 👨🚀 🌞 (@justinsuntron) April 12, 2026
Sun said he was not just a critic observing the situation from the outside. His own crypto wallet was blacklisted in 2025, he claimed, making him the project’s first and biggest victim. He called this feature contrary to what decentralized finance is supposed to represent.
WLFI has not issued an official public response to the allegations.
Borrowed millions against his own tokens
The accusation of covert control occurred alongside a separate controversy that had already gained attention. According to blockchain analytics firm Arkham Intelligence, WLFI deposited nearly 2 billion of its own tokens into the Dolomite lending protocol and borrowed more than $31 million in stablecoins against them.
The project now represents around 55% of Dolomite’s total liquidity – a concentration that has raised eyebrows among observers following the platform’s exposure.
Previous transactions went in a similar direction. Reports indicate that WLFI invested $14 million of its in-house stablecoin, USD1, to borrow $11.4 million USDC in February.
BTCUSD trading at $71,125 today. Chart: TradingView
Another $12.5 million in 1 USD was transferred directly to Coinbase Prime, bypassing the lending system entirely. In total, on-chain data shows the project used around 5 billion of its self-issued tokens to generate around $75 million in external liquidity – a structure that critics have compared to circular financing.
Token Price Drops as Pressure Mounts
The market has not been kind. WLFI’s token has fallen below $0.08 and lost more than 20% in the last 30 days. With the $1 loan pool operating near capacity, users looking to exit face increasingly strict conditions.
Reports also indicate that 3 billion WLFI tokens were moved in the first week of April, adding to the unease.
Sun ended his public statement with a demand: unlock the tokens and operate with transparency. Whether the team will act accordingly – or react at all – remains to be seen.
Featured image by David Hume Kennerly/Getty Images, chart by TradingView
Editorial process as Bitcoinist focuses on providing thoroughly researched, accurate and unbiased content. We follow strict sourcing standards and every page undergoes careful review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance and value of our content to our readers.
