World Liberty Financial (WLFI), linked to President Trump’s supporters, has faced backlash from Justin Sun after its recent $75 million DeFi loan tied up user liquidity. In a public statement, Sun condemned the project’s actions, stating, ‘Every action taken by the WLFI team to extract fees from users and to treat the crypto community as a personal ATM is illegitimate.’ Despite being an early supporter and investor in WLFI due to its promise of a decentralized finance platform, Sun distanced himself from the recent developments.
The criticism followed WLFI’s move to deposit 5 billion WLFI tokens on Dolomite as collateral, borrowing $75 million worth of stablecoins. This deposit accounts for the majority of Dolomite’s approximately $794 million in total supply liquidity. The protocol witnessed a peak utilization rate of 100% earlier this week, temporarily restricting access to funds for some users. By Sunday, utilization had decreased slightly to around 82%, with roughly $158 million borrowed against $193 million supplied.
Dolomite co-founder Corey Caplan, who also serves as an advisor to WLFI, has been described by onchain analysts as holding a role akin to CTO due to this dual involvement. To facilitate WLFI’s deposit, Dolomite increased its WLFI supply cap to 5.1 billion tokens.
Sun clarified that these developments are separate from his interests and those of other investors who trusted the project’s initial promises: ‘These actions have nothing to do with me. They have nothing to do with the investors who believed the promises this project made.’ Sun has strongly opposed each action taken by WLFI, despite having previously aided in stabilizing the platform by purchasing $30 million worth of WLIFI tokens following its lukewarm launch.
In September 2025, WLFI froze Sun’s wallet, restricting access to approximately 595 million unlocked tokens valued at around $107 million. The company justified this action as part of efforts against wallets involved in phishing attacks and compromised channels, claiming their goal was user protection rather than suppression of activity. Sun considers this freeze the ‘original sin’ of the project.
Sun criticized WLFI’s governance process for lacking transparency, alleging that votes justifying such freezes were conducted unfairly: ‘key information was withheld from voters,’ he claimed, asserting that results were predetermined. He emphasized his continued support for President Trump and crypto-friendly policies while specifically denouncing WLFI’s operators as ‘bad actors.’
As of Sunday, WLFi is trading at $0.079, according to CoinDesk data, marking an 18% decline over the past week. Co-founder Zak Folkman did not immediately respond to a request for comment.