Sun Yuchen criticized the Trump family project, World Liberty caught in investor "rebellion" storm.

Notice that World Liberty Financial Inc., the cryptocurrency project of the Trump family, is facing an investor "uprising", including support from billionaire supporter Justin Sun. Sun accused the project of secretly building a control mechanism that allows insiders to freeze token holders' funds. Sun had previously invested tens of millions of dollars in World Liberty. In a post he made on X platform last Sunday, he called the project a "trap disguised as a gate". His condemnation has escalated the criticism the project has recently faced. Previously, the project had used its WLFI tokens as collateral on a lending platform and borrowed $75 million. Critics argue that this move may allow World Liberty to cash out before unlocking a large number of tokens and flooding the market with new supply. World Liberty, however, stated that it can supplement collateral to prevent such situations and completely rejected the criticism. Spokesperson David Waxman said last Friday, "The suggestion that World Liberty is exiting any position is completely false; in fact, we are doubling down on our commitment according to our roadmap," revealing that the project has already repaid $25 million in loans. "We are committed to sound risk management and continually evaluate our positions and collateral structures, which is also the reason why we have repaid 33% of the loans," Waxman said. However, since a partial supply of WLFI tokens was unlocked for trading last year, the price has dropped by more than half. World Liberty stated that it has deposited 3 billion tokens into the loan agreement Dolomite and borrowed $75 million in stablecoins. It is worth noting that Cory Caplan, co-founder of Dolomite, is also the Chief Technology Officer of World Liberty. Current concerns revolve around the potential liquidation of the position if the price of WLFI drops significantly, which could lead to tokens being sold on the market and accelerate the feared sell-off by investors. Many users on the X platform have also expressed concerns about this loan on Dolomite. Morten Christensen, an investor in WLFI and also an operator of AirdropAlert.com, said, "As a project, using your own token as collateral for a loan is a very bad practice," "This will instill fear, doubt, and anger in the minds of investors." Representatives of Dolomite, including Caplan, did not respond to requests for comments. Timing Issue This move has attracted special attention due to its timing. World Liberty is expected to soon release a long-awaited proposal that sets a schedule for unlocking 80% of WLFI tokens held by early investors. Typically, when tokens are unlocked and more supply enters the market, there is downward pressure on prices. Critics point out that if this position is liquidated through Dolomite, World Liberty could effectively cash out before other sellers act. In addition, Dolomite may also incur bad debts as a result. Austin Campbell, adjunct professor at NYU Stern School of Business and stablecoin expert, commented, "This fundamentally means that the World Liberty team is 'hitting the market' for retail investors." World Liberty insists that it has enough financial resources to support its position. In a post last Thursday, the project stated that it is "far from liquidation". "Frankly, even if market volatility is extremely unfavorable to us, we only need to provide more collateral." The rebound sentiment is not limited to lending operations. In March of this year, World Liberty forcibly passed a governance proposal that could weaken the voting rights of early investors in key decisions. Sun accused the project's voting process of being a scam, alleging that crucial information was hidden and the outcome was predetermined. In 2025, Sun also accused the project of blacklisting his WLFI token wallet, preventing him from withdrawing unlocked tokens. World Liberty did not respond to questions about Sun's blacklisting accusations. Additionally, the project posted on X on Sunday, stating: "We have evidence. We hold the truth." World Liberty was co-founded by President Trump and his sons. Sun had dinner with Trump last year. The intertwining of the President's brand with the latest controversy has raised issues far beyond the industry itself involving disclosure of information, potential conflicts of interest, and what happens when a political brand essentially anchors a cryptocurrency project that includes retail investors. Blockchain technology does provide some clues for example, transactions on Dolomite are visible on the chain. However, unlike public companies, most cryptocurrency projects are not subject to similar disclosure and governance regulations, meaning they do not need to provide regular audited financial statements, publicly disclose internal trades, or be subject to oversight by exchanges' independent boards. This makes it more difficult for external investors to assess the true situation.