Trump Crypto Venture's Largest Investor Accuses Firm of Secret Account Freeze
Justin Sun, the most significant investor in Donald Trump's cryptocurrency venture, has publicly accused World Liberty Financial of secretly deploying a tool to unilaterally freeze his holdings of its digital tokens. In a series of social media posts on Sunday, Sun alleged that the company embedded a "backdoor blacklisting function" within the blockchain contracts for WLFI tokens, granting it unchecked power over user assets.
Allegations of Unilateral Control and Frozen Assets
Sun claimed that this function allows World Liberty to "freeze, restrict, and effectively confiscate the property rights" of any token holder without cause or recourse. He identified himself as the "first and single largest victim," pointing to the freezing of his token holdings in September. At that time, World Liberty stated it did not intend to blacklist anyone but responded to "malicious or high-risk activity" to protect community members.
On Monday, Sun cited unspecified blockchain records, asserting they showed his digital wallet was "blacklisted" by a single account with special administrative privileges. He emphasized that this evidence suggests "one person—one single individual" at World Liberty holds the authority to freeze any token holder's assets, though he did not share the records publicly.
Company Response and Legal Threats
In response to Sun's allegations, the official World Liberty account on X posted a defiant reply: "We have the contracts. We have the evidence. We have the truth. See you in court pal." A company spokesperson directed inquiries to these social media posts, while Sun and his representatives offered no further comment. Reuters could not independently verify the existence or use of such a tool by World Liberty or details about Sun's trading activities.
Background on World Liberty and Sun's Involvement
World Liberty is a prominent cryptocurrency business co-founded by the Trump family, launched in 2024 with promises of empowering small investors through a decentralized finance app, which remains unlaunched. According to a Reuters analysis, it generated over $460 million in income for the Trump family in the first half of 2025. Sun became the largest publicly known investor in late 2024, spending tens of millions on WLFI tokens and serving as an adviser. By January 2025, his holdings reportedly exceeded $75 million, which he described as a vote of confidence in the Trump family's "excellent project."
Regulatory Context and Industry Practices
World Liberty's risk disclosures acknowledge the company's ability to block and freeze wallet addresses and tokens associated with illegal activities or terms violations. Similar practices exist elsewhere in the crypto industry; for instance, Tether, the issuer of the world's largest stablecoin, can freeze tokens based on suspected illegal usage or law enforcement requests. In March, the Securities and Exchange Commission settled a 2023 lawsuit against Sun for $10 million over allegations of fraud and selling unregistered crypto securities, though Sun admitted no wrongdoing. The SEC declined to comment on rules surrounding such freezes, highlighting the regulatory grey area for cryptocurrencies in the United States, where the agency lacks overarching jurisdiction.
