Justin Sun blasts Trump-linked WLFI's 'absurd' governance vote, escalating feud

The Tron founder claimed that dissenters would face token lockups and exclusion from voting, while the project said the proposal aims to align all participants for the long-run.

What to know:

• Justin Sun accused the Donald Trump-linked crypto project World Liberty Financial of engineering an "absurd" governance proposal that punishes dissenting token holders with indefinite lockups.
• The disputed plan would impose multi-year lockups and vesting on more than 62 billion WLFI tokens, burn up to 4.5 billion tokens, and give insiders strict new release schedules while allowing controlling wallets to override votes and blacklist users.
• The proposal was designed to "align all the participants in the WLFI ecosystem for the long-run," a WLFI spokesperson said.
• The clash marks the latest breakdown in the relation between WLFI and Justin Sun after WLFI's threat of legal action against Sun and its earlier blacklisting of his token stake.

A public dispute between Tron founder Justin Sun and Trump-linked crypto project WLFI$0.08079 escalated Wednesday after Sun sharply criticized a new governance proposal, calling it "one of the most absurd governance scams" he has seen.

In a lengthy post on X, Sun accused the project of designing a vote that punishes dissent, with token holders who vote against the proposal risking having their tokens locked indefinitely.

He also claimed he and other large holders had been excluded from the process, alleging that tokens tied to roughly 4% of voting power under his control had been frozen.

More broadly, Sun questioned whether the vote has any real authority, claiming control over the protocol sits 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 said in the post. "It is an exercise of power by the selected few who are carefully engineering a further power consolidation and property expropriation operation."

WLFI proposal

The criticism centers on WLFI's new proposal that would overhaul token lockups across the ecosystem. More than 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.

Holders who do not accept the new terms would remain locked indefinitely, per the proposal.

Sun was not alone in pushing back. Simon Dedic, founder of Moonrock Capital, said early investors had effectively 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 appeared 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 World Liberty Financial spokesperson told CoinDesk that the proposal "was designed to further align all the participants in the WLFI ecosystem for the long-run," adding that it aims to "optimally ensure long-term participation in our ecosystem and help ensure healthy market supply."

Escalating feud

The backlash marks the latest episode in the breakdown in relations between Sun and the project.

Earlier this week, WLFI threatened legal action, saying it had "contracts" and "evidence" after Sun accused the team of exploiting users through DeFi transactions.

The dispute has been building 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. That marks 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 help support the project.

Tensions intensified after WLFI deposited 5 billion of its own tokens into 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.

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