WLFI Token Drops 50% After Justin Sun Blacklist: Centralization Risk?

The WLFI token from World Liberty Financial once fell to $0.16—cutting its value in half—after developers blacklisted Justin Sun’s wallet and froze billions of tokens associated with him.

This move has deepened divisions in the community and raised concerns about centralization and the outsized influence of large investors in new token launches.

WLFI Blacklisting: What Happened to Justin Sun’s Holdings?

WLFI launched amid significant hype and high trading volumes on major exchanges. However, sharp price swings and decisive actions by top stakeholders have intensified skepticism. With scrutiny mounting, discussions about transparency and governance now dominate the project’s outlook.

Only a few days after WLFI’s debut, World Liberty Financial froze Justin Sun’s wallet, locking 540 million unlocked and 2.4 billion locked WLFI tokens. Sun, having invested $75 million to acquire about 3 billion tokens, saw his large stake rendered inaccessible, sending shockwaves through the crypto world.

This action came amid suspicions of Sun—or an exchange he influenced—moving tokens to suppress the price. WLFI’s first-hour trading volumes surpassed $1 billion, while the price dropped steeply from $0.40 to under $0.20.

On-chain records confirmed that at least 50 million WLFI—worth about $9 million—were transferred from Sun’s wallet just before the blacklist. While Sun claimed these were “minor deposit tests” that could not affect the market, blockchain analysis challenged that assertion. This led to accusations that Sun and some exchanges may have offloaded large amounts on the first day.

Public concern grew as blockchain trackers flagged Sun’s and select exchange addresses’ significant WLFI holdings and activities. As of early September 2025, Sun still holds 545 million WLFI, valued at more than $100 million at recent prices. Records show Sun employed several creative methods to move tokens, sometimes surpassing the vesting schedule outlined publicly.

Community Reaction: Centralization and Trust in the Spotlight

The decision to freeze Sun’s wallet brought little agreement within the WLFI community. Many argue the move exposes the dangers of centralization and developer control, especially since the team could target high-profile accounts. Critics contend that such actions contradict WLFI’s decentralized governance claims and weaken holders’ trust.

Others argue the freeze was justified, citing manipulation attempts by large investors and affiliated exchanges. The controversy widened when HTX—a platform linked to Sun—offered 20% APY on WLFI deposits. This raised questions about whether user funds were sold to meet significant withdrawals or suppress prices on other exchanges.

An industry commentator noted the vulnerabilities highlighted by the launch, including token distribution and the vast share owned by insiders and exchanges. Although only 6.8% of WLFI’s supply officially unlocked at launch, actual trading suggested far greater liquidity—hinting at selling pressure from a few large insiders.

Record trading volume and declining prices quickly changed expectations for the WLFI launch. Instead of a positive debut, the event became a cautionary tale about concentrated ownership, power dynamics, and the challenges facing token holders—even in community-oriented projects. Regulators increasingly examine high-profile launches and political ties. The outcome of the WLFI saga may influence transparency and governance standards in the crypto industry.

As of publishing hours, the WLFI price rebounded to $0.18, but it was still over 15% down from the previous day.