“Today It’s Sun—Who Will Be Next?” Insiders Question After WLFI Justifies Freeze as ‘User Protection’

World Liberty Financial (WLFI) is defending its decision to freeze more than 270 wallets — including one tied to Tron founder Justin Sun — insisting the move was aimed at stopping phishing-related compromises rather than interfering with market activity.

In a statement on X, the project said: “WLFI only intervenes to protect users, never to silence normal activity.” Of the frozen wallets, about 215 were linked to phishing attacks and 150 to support channel breaches.

Sun’s Transfers Misread as Selling

Sun’s WLFI wallet was blacklisted on Friday after he carried out small “dispersion test” transfers between his accounts following token unlocks at launch. None of the transactions were sales, but they fueled speculation he was dumping tokens.

Onchain analysis shows otherwise. Nansen data reveals Sun’s largest transfer — 50 million WLFI worth roughly $9.2 million — occurred on Sept. 4 at 09:18 UTC, hours after the token’s steepest decline.

“The timeline proves Sun didn’t trigger the sell-off,” Nansen founder Alex Svanevik wrote on X.

Market Makers Behind the Slide

Further onchain records highlight a $12 million WLFI transfer from HTX to Binance by a third-party market maker. The tokens were borrowed for rebalancing, not liquidation, and the size was negligible compared to WLFI’s $700 million daily trading volume.

Instead, analysts point to broad shorting and coordinated selling across multiple exchanges as the true cause of the crash. A transfer from BitGo to Flowdesk flagged by Nansen aligned closely with the start of WLFI’s slide and is now viewed as a key trigger.