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In recent days, the crypto scene has voiced serious allegations against World Liberty Financial (WLFI for short). It is a crypto platform in which the Trump family holds a significant stake. A few puppet masters are allegedly abusing the service to rake in money through fraudulent means.
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Is WLFI a scam? Why allegations against the Trumps are mounting
Over the past few days, serious allegations against WLFI have surfaced in the crypto scene. WLFI or World Liberty Financial is a DeFi platform currently in development that gained notoriety particularly due to its connection to the Trump family.
The Trumps founded the company in 2024 together with other business partners. They remain shareholders to this day. Eric Trump and Donald Trump Jr., two sons of US President Donald Trump, are said to be actively involved in the management of the company in leading positions.
Last Thursday, the publication CoinDesk released a report on WLFI, potentially uncovering shady business practices. According to the report, the platform’s operators used their namesake token, WLFI, to post it as collateral for loans to unlock stablecoins.
The problem: WLFI’s operators obtained the liquidity from the lending service Dolomite, with which they are closely intertwined. Corey Caplan, co-founder of Dolomite, is also an advisor to WLFI.
In total, World Liberty Financial deposited five billion WLFI with Dolomite and received 75 million US dollars in the form of the stablecoin USD1. USD1 is also a token operated by World Liberty Financial.
The company World Liberty Financial is therefore using its own unbacked, volatile token WLFI to claim liquidity provided by investors. 93 percent of all USD1 deposited on Dolomite has already been lent out.
“At this utilization rate, many of the depositors who put USD1 into the pool expecting to be able to withdraw it at will cannot do so simultaneously. Their funds are effectively locked until the borrower has repaid their debt,” CoinDesk commented on the situation.
The fact that WLFI serves as collateral is another problem. Due to its low trading volume, the token could drop rapidly and cause further damage to the investors who provided World Liberty with their USD1 if it were liquidated.
Some X users speculate that World Liberty could use the loans to bet on prediction markets regarding political actions taken by US President Donald Trump. Given the insider knowledge of those in charge, losses on these bets would be nearly impossible. Yesterday, CoinDesk reported that WLFI created 22 million new USD1, giving the development additional momentum.
Why major investor Justin Sun is warning against WLFI
Only a few days after the first scandal, crypto entrepreneur Justin Sun added more fuel to the fire. He made serious allegations against the puppet masters of World Liberty Financial regarding their handling of the WLFI token.
Justin Sun is the creator of the Tron blockchain and has been one of the most well-known major investors in the crypto industry for years. In 2025, he invested 75 million US dollars in the Trumps’ crypto project. Sun apparently expected both financial and legal benefits from this. Investigations by the US Securities and Exchange Commission (SEC) against Sun were subsequently dropped. Now, however, he is expressing disappointment.
“I am the first and biggest victim – as early as 2025, they illegally blacklisted my WLFI wallet, which violates fundamental investor rights and the fairness principles of the blockchain,” Sun wrote.
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The Chinese-born entrepreneur claims that WLFI is being manipulated by a few influential operators away from public view. It is actually supposed to be a governance token. However, crucial votes are said to be accessible only to a few users instead of the broad mass of holders.
Furthermore, the puppet masters are allegedly maintaining a blacklist of unwelcome wallet addresses. Their WLFI can be locked or even destroyed at will. According to Sun, his funds fell victim to such a lock in 2025.
World Liberty Financial, according to Sun, hides behind the values of freedom and decentralization, but then acts deliberately against these values. He is therefore calling on those responsible to improve the conditions. Otherwise, he says, the project is not viable for the future.
“The actions of the WLFI team undermine the community’s trust in the project. Unlock the tokens and maintain transparency. Let’s build through integrity, not through dishonesty.”
Sun did not reveal who the key puppet masters behind WLFI are. The market value of the token suffered significantly as a result of the allegations. In the weekly trend, the WLFI price fell by 14 percent to 0.081 US dollars.
