Justin Sun has strongly criticized a governance proposal introduced by World Liberty Financial, a project linked to Donald Trump, describing it as one of the most questionable governance schemes he has encountered.
In a post on X, Sun argued that the proposal, which WLFI presents as a governance alignment signal and long term commitment mechanism, effectively punishes participants who vote against it by locking their tokens indefinitely. He explained that this setup creates a coercive environment where dissenting voters face consequences without any clear path to unlock their assets.
Concerns Over Voting Restrictions and Centralized Control
Sun also raised concerns about the integrity of the voting process, claiming that certain stakeholders, including himself, have been excluded. Despite holding roughly 4 percent of the voting power, he said his tokens have been frozen, preventing him from participating. He added that other major holders face similar restrictions, while the project team retains the ability to freeze tokens, effectively controlling who can vote and influencing the outcome.
He compared the process to a controlled system where participation is limited to approved individuals, arguing that this undermines the legitimacy of the vote. According to Sun, the governance structure is further compromised by the control of smart contracts, which he said are managed by a small group of anonymous actors through a multisignature setup and a separate guardian account with the power to blacklist addresses.
This level of control, he argued, contradicts the principles of decentralized governance, as decision making authority appears to rest with unidentified individuals rather than the broader community. Sun described the system as resembling a dictatorship disguised as a decentralized autonomous organization.
Proposal Details and Token Impact
The proposal from World Liberty Financial involves changes affecting more than 62 billion WLFI tokens. It suggests that 45.23 billion tokens held by advisors, institutions, partners, founders, and team members would be subject to a two year waiting period followed by a three year gradual release schedule for those who opt in. It also includes a plan to burn 10 percent of tokens, potentially removing up to 4.52 billion tokens permanently.
For early supporters, 17.04 billion locked tokens would transition into a two year waiting period and a two year gradual release without any token burn. Those who choose not to accept the new terms would have their tokens remain locked indefinitely under existing conditions. WLFI stated that these measures are intended to strengthen long term participation and reduce circulating supply.
Additional Red Flags Highlighted
Sun’s remarks follow earlier concerns he raised about hidden control mechanisms within the project. He pointed to an anonymous wallet and a small group of individuals who allegedly have the authority to freeze user funds.
These claims are based on on chain analysis supported by blockchain researcher banteg, who noted that WLFI token contracts were modified over time to include features such as a blacklist function. According to the findings, these updates allow certain addresses to restrict or reallocate tokens, including a mechanism designed to recover funds lost to scams.
Sun, who has invested 75 million dollars into WLFI and is its largest backer, stated that he was not informed about these controls. He also claimed that a single external account has the power to freeze any holder’s assets, raising further concerns about transparency and decentralization within the project.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
