Sun Ge's "Rights Protection" Standoff Against the Trump Family, WLFI is the Real Crypto Scythe
- Core Viewpoint: The article exposes the Trump family's crypto project WLFI for allegedly engaging in disguised dumping and market manipulation through affiliated lending protocols. It points out that its "pseudo-decentralized" governance contradicts the project's original purpose, essentially leveraging political influence to amass wealth in the crypto market.
- Key Elements:
- WLFI was exposed for using approximately 50 billion tokens as collateral to borrow around $75 million in stablecoins via the advisor-affiliated DeFi protocol Dolomite, raising market suspicions that it serves as a channel for the team to cash out.
- Since its launch, the WLFI token price has plummeted over 66%. The article analyzes that the main selling pressure likely originates from the Trump family and its affiliates, who hold the vast majority of tokens (73.95%).
- The project team once blacklisted 272 addresses, including Justin Sun's, citing "preventing dumping" as the reason. This was criticized as actually restricting others from selling to facilitate their own offloading, contradicting their proclaimed "de-banking" philosophy.
- Justin Sun publicly condemned the WLFI team's actions. However, the article analyzes that due to his own regulatory history and the political forces behind WLFI, it would be difficult for him to effectively seek legal recourse in the United States.
- The article argues that as Trump's focus on the crypto industry wanes and WLFI's issues come to light, its political halo effect is diminishing. The market should be wary of such "shoddy projects" that rely on power and influence.
Original | Odaily (@OdailyChina)
Author｜Golem (@web3_golem)
The true face of WLFI has finally been seen clearly by the crypto community.
On April 9, foreign media reported that the Trump family's crypto project, World Liberty Financial (WLFI), had conducted multiple collateralized loans through the DeFi lending protocol Dolomite, sparking market concerns about insider trading and USD1 liquidity risks. According to statistics, WLFI used approximately 5 billion WLFI tokens as collateral to mobilize around $75 million in stablecoins cumulatively through Dolomite and Coinbase Prime.
Coincidentally, Dolomite co-founder Corey Caplan is also an advisor to WLFI. Although WLFI responded that borrowing stablecoins was to create value for the ecosystem and there was no liquidation risk, and WLFI even repaid a $25 million USD1 loan on April 11, tracking the on-chain path of its borrowed stablecoins makes it obvious to anyone with eyes that Dolomite is essentially a disguised token-selling channel for the WLFI team.
Well-known trader Pickle Cat also believes that WLFI is performing a confidence-boosting high-price buyback with its left hand while borrowing real money with low-price collateral with its right hand. In the end, only the retail investors locked in the Dolomite pool are left holding the bag. Therefore, she decisively liquidated all her WLFI spot holdings.
WLFI's price performance since its launch has already told the whole story. WLFI officially launched on September 1, 2025, and began executing token buybacks in late September of the same year. However, the token has since fallen over 66%, down approximately 70% from its peak. So, where is the selling pressure in the market coming from? Most likely from the Trump family and its stakeholders. Firstly, it's unlikely they only have Dolomite as a disguised selling channel. Secondly, they are also the ones holding large amounts of WLFI tokens and are "able to sell without restrictions."
Even before WLFI's official launch, Odaily analyzed WLFI's token holding structure and selling pressure, concluding that the Trump family was the largest source of token selling pressure. With a total supply of 100 billion tokens, the presale accounted for only 26.05% of the total, leaving the remaining 73.95% entirely under the team's control. (Related reading: WLFI Unlock Countdown: Trump's 15.75% Whale Holdings, Can the Market Withstand the "Presidential Selling Pressure"?)
Furthermore, after the WLFI token officially launched, the team blacklisted 272 addresses, including one belonging to Sun Yuchen (Justin Sun), citing the protection of user funds and preventing large-scale sell-offs by whales. This move was praised by the community at the time. But only now, with the ongoing decline of WLFI, have we realized that the real purpose of freezing whale addresses was to facilitate their own selling.
The story doesn't end there. After the WLFI team's actions were exposed, Sun Yuchen couldn't sit still either. The famously shrewd "Sun Cut" (a nickname implying he cuts profits/takes advantage) isn't one to take a loss lying down. You can sell, but I can't? So, he confronted WLFI once again.
Sun Yuchen Confronts WLFI Again
On April 12, Sun Yuchen posted on X condemning the WLFI team for extracting fees from users, secretly implanting backdoors to control user assets, freezing investor funds, and treating the crypto community as a personal ATM, among other actions. The WLFI team didn't just take Sun's accusations lying down. They responded, saying Sun Yuchen is best at playing the victim, fabricating baseless accusations to cover up his own misconduct, and stated they would see him in court.
To fully understand this drama, we need to revisit the relationship between Sun Yuchen and WLFI.
WLFI and Sun Yuchen had a honeymoon period. In November 2024, Sun Yuchen announced a $30 million investment in WLFI through the TRON DAO entity, becoming WLFI's largest investor and project advisor at the time. This deal was interpreted as Sun Yuchen's political donation to Trump, especially since Trump's election as president was already a foregone conclusion, and crypto figures wanted to build good relations. So, it was a win-win: WLFI got the money, and Sun Yuchen opened a channel to connect with the US President.
However, when the WLFI token actually launched, the WLFI team kicked Sun Yuchen to the curb. On September 5, 2025, World Liberty Financial (WLFI) blacklisted addresses related to Sun Yuchen, involving approximately 540 million unlocked tokens and 2.4 billion locked tokens. The WLFI team's reason was straightforward: they suspected someone was selling to suppress the token price. WLFI blacklisted 272 addresses in one go at that time.
Although Nansen CEO Alex Svanevik later stated that Sun Yuchen did not engage in a sell-off, and his transfers occurred after the WLFI token had already plummeted. The truth behind WLFI's price drop at that time might have been massive profit-taking by retail investors and further price suppression due to panic in the market. But because WLFI used the community as a shield, Sun Yuchen didn't confront them head-on.
Still, some spoke up for Sun Yuchen. CryptoQuant CEO Ki Young Ju argued that even if Sun Yuchen sold his unlocked tokens, it was his right, as he has autonomy over his assets, and WLFI had no right to freeze user addresses. Ironically, the Trump family has repeatedly stated in public that "debanking" was a primary reason for their entry into crypto, as their family assets had been frozen by the banking system multiple times. But how is their action of blacklisting user addresses fundamentally different from the banks that rejected them? This "pseudo-decentralized" behavior deserves condemnation.
That said, while Sun Yuchen's situation warrants sympathy, if he chooses to fight WLFI to the end, he might not come out ahead. Because behind WLFI stands the Trump family and a network of top-tier American political and business elites with deep, intertwined connections. Which one can Sun Yuchen afford to offend?
Moreover, considering Sun Yuchen's own regulatory history, political situation, and past controversies, if he were to actually face WLFI in a US court, winning the lawsuit might be out of the question; escaping unscathed could be considered a fortunate outcome.
So, for Sun Yuchen's "rights defense," he can make noise in the court of public opinion and posture alongside retail investors. But taking it all the way to a US courtroom? Probably not.
The Second Lesson the Trump Family Taught the Crypto World
We must admit that WLFI is the second lesson the Trump family has taught the crypto world (the first being TRUMP, of course). Its true purpose was never to break traditional banking limitations or make DeFi better, but to amass wealth frantically in the gray areas of financial regulation.
Many were unwilling to admit or overlooked this before because the name "Trump" still held significant value. In a bull market sentiment, power and influence are automatically translated into a sense of security and a moat. Coupled with Trump's extremely friendly stance towards crypto during his campaign and early presidency, the crypto community did not erupt in large-scale protests or FUD. The Trump family ate the meat in the crypto market, and we could have some soup.
But things are different now. In the broader context, with the "Crypto Czar" David Sacks shifting his focus to AI and Trump deeply embroiled in the US-Iran conflict with little time for the crypto industry, the halo around the Trump name has dimmed. When Trump is no longer "our crypto president," what光环 (halo) does his family have left? (Related reading: "Crypto Czar" Steps Down: 130-Day Political Performance Ends, How Much of Trump's Crypto Promises Remain?)
At the same time, regarding the WLFI project specifically, influenced by token performance, governance disputes, and freezing incidents, this滤镜 (filter) has been largely torn apart in the minds of users. The crypto world is not innocent either; being willing to pay a premium for权势 (power/influence) and political背景 (background) is itself a form of speculative complicity. But going forward, when faced with "shoddy projects" like WLFI crafted by the American elite in the crypto space, we should have the courage to say no.
