TL;DR
Justin Sun calls WLFI a personal ATM for insiders.
A $75 million DeFi loan locked out ordinary depositors.
Sun lost $107 million after WLFI froze his wallet.
The largest outside investor of the Donald Trump-linked platform goes public days after WLFI took a $75 million DeFi loan. Justin Sun calls the team’s actions “illegitimate” and declares himself the “first and single largest victim” of the project.
World Liberty Financial (WLFI) deposited 5 billion of its own tokens as collateral on the Dolomite lending protocol. In return, the platform borrowed roughly $75 million in stablecoins. The operation pushed one liquidity pool to 100% utilization at its peak earlier this week. That congestion temporarily locked out ordinary depositors who could not withdraw their funds. By Sunday, the pool eased to 82% utilization, with $158 million borrowed against $193 million supplied.
Sun did not hold back. “Every action taken by the WLFI team to extract fees from users and to treat the crypto community as a personal ATM is illegitimate,” he wrote in a public statement. The Tron founder clarified that his support for President Trump remains intact, but he directed his criticism squarely at “the bad actors at WLFI.”
A loan that locked out ordinary depositors
The loan mechanics reveal structural problems. WLFI used its own tokens as collateral on Dolomite, a protocol where co-founder Corey Caplan also serves as an advisor to World Liberty Financial. On-chain analysts describe that dual role as functionally equivalent to a chief technology officer. To accommodate WLFI’s deposit, Dolomite raised its WLFI supply cap to 5.1 billion tokens.
WLFI’s deposit now dominates Dolomite. It accounts for the majority of the protocol’s roughly $794 million in total supply liquidity. When the USD1 pool hit 100% utilization, ordinary depositors lost temporary access to their money. An average user could not withdraw funds while the Trump-linked project occupied the entire capacity.
Sun argues that the team’s actions do not represent him or the investors who believed the promises. “We oppose every one of these actions in the strongest possible terms,” he added.
The history of clashes between Sun and WLFI goes back further. In September 2025, WLFI froze Sun’s wallet, locking him out of 595 million unlocked tokens then worth $107 million. WLFI justified the move as part of a broader action against 272 wallets linked to phishing attacks and compromised support channels. The platform insisted it only intervenes to protect users, not to silence normal activity.
Sun rejects that explanation. “I am the first and single largest victim as a result of their wrongful blacklisting of my WLFI token wallet back in 2025,” he wrote. He added that the action violates basic investor rights and blockchain principles of fairness. He also attacked WLFI’s governance process, alleging that votes used to justify the freezes “were not conducted through a fair or transparent process,” that “key information was withheld from voters,” and that “the outcomes were predetermined.”
The WLFI token reflects the distrust. It trades around $0.079 after a sharp weekly decline. Sun had helped stabilize the project early on, buying $30 million in WLFI tokens after a lukewarm launch raised questions about investor appetite.
The conflict exposes the risks of concentrating power and liquidity in protocols with cross-linked ties. An advisor to Dolomite also works for WLFI. The same protocol adjusts its limits to accommodate a massive deposit. Then that deposit blocks ordinary users. The structure mixes roles and creates perverse incentives.
DeFi projects that promise transparency can end up operating as black boxes when personal relationships and financial interests overlap. Sun, an insider who lost access to his funds, now warns from the outside. His warning arrives too late for those trapped in the pool at 100% utilization.
The WLFI-Dolomite case will not end with a simple statement. Sun’s public exit adds regulatory pressure to an already questioned project. Senators Warren, Schiff, and Blumenthal are investigating another Trump-linked event at Mar-a-Lago.
Now the $75 million loan and the Dolomite conflict of interest add more questions. Who oversees advisors who manage protocols where their own projects deposit funds? The answer, for now, does not appear in any white paper.
