Justin Sun Flags ‘Coercion Tactics’ in WLFI Proposal Impacting Billions in Tokens

Tron founder Justin Sun has publicly slammed a governance proposal put forward by the Donald Trump-linked project World Liberty Financial, calling it “one of the most absurd governance scams” he has ever seen.

In a post on X, Sun stated that the proposal, described by WLFI as a “governance alignment signal” and long-term commitment mechanism, effectively penalizes dissenting voters by locking their tokens indefinitely if they vote against it.

According to him, this structure transforms the voting process into what he characterized as coercion, as participants who oppose the proposal face punitive consequences without any defined unlock mechanism.

Justin Sun Blasts WLFI

Sun claimed that the voting process is compromised by the exclusion of certain stakeholders, including himself. He noted that despite holding approximately 4% of the voting power, his tokens have been frozen, thereby preventing participation. He added that multiple holders with significant voting rights are similarly unable to vote, while the project team retains the authority to freeze tokens, which he said pre-determines the outcome of the vote by restricting participation to those permitted by the team.

“This is not a governance vote. This is a performance where the police have already barricaded the doors of parliament and only let their own people inside to raise their hands. The voter pool has been purged. Only yes votes remain.”

Concerns were also raised over the control structure of WLFI’s smart contracts, with the Tron founder stating that authority resides with a 3-of-5 anonymous multisignature group and a single anonymous guardian account capable of blacklisting addresses. He stressed that these unidentified actors can override governance outcomes and execute changes directly at the contract level.

This concentration of control contradicts the principles of decentralized governance, Sun argued, while asserting that decision-making power is effectively centralized among anonymous entities whose identities remain undisclosed. Such a system is “a dictatorship wearing the mask of a DAO,” Sun added.

The governance proposal from World Liberty Financial outlines changes affecting a total of over 62 billion WLFI tokens. It proposes that 45.23 billion tokens held by advisors, institutions, partners, founders, and team members be subject to a two-year cliff followed by a three-year linear vesting schedule upon opting in, along with a 10% token burn, which would potentially result in the permanent destruction of up to 4.52 billion tokens.

For early supporters, 17.04 billion locked tokens would move to a two-year cliff and a two-year linear vest without any burn, while holders who do not accept the new terms would remain locked indefinitely under existing conditions. WLFI stated that the proposal aims to boost long-term governance participation and reduce circulating supply through token burns and extended lockups.

Red Flags

The comments came days after his earlier accusations against World Liberty Financial over hidden control mechanisms within its system. Earlier this week, Sun flagged issues around an anonymous wallet and a small group of signers that he claims have the power to freeze user funds.

His claims are based on on-chain analysis supported by blockchain researcher banteg, who pointed out that WLFI’s token contracts were updated over time to include a blacklist function and other features. These updates, added after Sun had already invested, reportedly allow certain addresses to restrict or reallocate tokens. One upgrade also introduced a mechanism described as “batch reallocation,” which WLFI said was meant to recover funds lost to scams.

Sun, who invested $75 million in WLFI and is its largest backer, said he was not informed about these controls. He also claimed that a single external account has the authority to freeze any holder’s assets.

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