On-chain data shows World Liberty Financial’s controlling address 0x407F…5178 took direct action against Justin Sun.

The address called the `guardianSetBlacklistStatus` function on the WLFI Token contract, blacklisting 0x5AB2…DA74. This address has been linked to Sun.

That call froze Sun’s WLFI tokens, preventing any movement. It’s the first major use of blacklist controls on the token contract since launch.

WLFI Exchange Transfers Surface

Blockchain traces reveal a new wrinkle. Over the past 32 hours, HTX’s “HTX 48” wallet moved ~60,000,000 WLFI to a Binance deposit address: 0xf387D7…29FcB5.

In response, Justin Sun denied market activity.

He wrote:

“Our address only conducted a few small deposit tests to the exchange, followed by some address splitting. There was no buying or selling involved, and it could not have had any market impact.”

Despite his defense, the timing of these transfers lined up closely with the blacklist action.

Sun Pushes Back

Sun took to X with a long post, claiming his tokens were frozen without cause.

He reminded the WLFI community that he was an early major investor, adding capital, trust, and public support. He framed the freeze as a betrayal of blockchain’s core principles:

“Tokens are sacred and inviolable—this should be the most basic value of any blockchain. It’s also what makes us stronger and more fair than traditional finance.”

He urged the World Liberty Financial team to unlock his tokens and move forward together.

Sun closed with a warning that unilateral freezes threaten the brand’s credibility:

“Such measures not only violate the legitimate rights of investors, but also risk damaging broader confidence in World Liberty Financials.”

To the World Liberty Financials team and the global community,

As one of the early major investors in World Liberty Financials, I have contributed not only capital but also my trust and support for the future of this project. My goal has always been to grow alongside the team…

— H.E. Justin Sun 👨‍🚀 (Astronaut Version) (@justinsuntron) September 5, 2025

The Launch Breakdown

While the blacklist shocked many, the WLFI launch itself has been messy. On-chain analyst Quinten Francois laid out the numbers.

Community allocation was meant to be 5%. In reality, only 4% circulated—many skipped the lockbox.

Liquidity and marketing share was 2.8%, not the 1.6% first reported.

Total initial circulating supply sat at 6.8%.

Another 17.8% (10% ecosystem + 7.8% Alt5 Sigma) was technically free but not vesting-locked.

Justin Sun’s Allocation

Sun controlled 3% of total WLFI supply. At launch, just 20% of his stash was unlocked. The remaining 80% sat in lockup. He had stated publicly that he wouldn’t sell.

Price Action Turns Strange

WLFI debuted at $0.30. Billions in trading volume followed. Hype was massive.

But price didn’t climb—it slid. The chart showed robotic movement. Retail wasn’t dumping, but the token bled anyway.

According to Francois, exchanges may have dumped their 2.8% allocation directly. Meanwhile, Sun allegedly routed WLFI through HTX, his exchange, offering users 20% APY to deposit WLFI.

This structure let him quietly dump into liquidity while presenting it as a staking product. Behind the scenes, he could later replace user withdrawals with his locked stash as it unlocked.

Reports say this mechanism collapsed when withdrawals outpaced his ability to cover. His WLFI-linked address was blacklisted. Retail holders realized they might have been used as exit liquidity.

🚨 The $WLFI launch mess – explained 🚨

1. Launch day (Sept 1)
– Community: meant to be 5%, but really 4% went live (not everyone used the lockbox).
– Liquidity & marketing: 2.8% (not 1.6% like first reported).
– Together = 6.8% circulating supply.
– Other allocations (10%… pic.twitter.com/T4wwXzQX1o

— Quinten | 048.eth (@QuintenFrancois) September 5, 2025

$WLFI Market Context

At launch, $WLFI listed at $0.30, with initial hype driving volume into the billions. Current market price data from CoinMarketCap shows WLFI trading far below its opening mark, reflecting shaken confidence.

The WLFI freeze highlights a clash between central control and blockchain ideals. The ability to blacklist addresses can protect protocols from exploits. But freezing a major investor like Sun—without community vote—sets a precedent many see as dangerous.

For World Liberty Financial, the move signals strict enforcement. For Justin Sun, it’s an attempt to frame himself as victim of unfair governance.

The community is left in the middle—watching on-chain drama unfold in real time.

What’s Next

If Sun’s WLFI remains frozen, he loses direct control over his stake. His appeal on X signals he won’t let the issue fade quietly. The team, meanwhile, hasn’t issued a direct public response.

The market continues to digest the implications. WLFI’s price will likely track not just tokenomics but also governance credibility.

One thing is clear: what started as a hyped launch has shifted into a test of trust, transparency, and control in World Liberty Financial.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

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