In a bold move sparking waves of controversy, World Liberty Financial (WLFI) has frozen hundreds of cryptocurrency wallets—including one belonging to Tron founder Justin Sun. As of September 6, 2025, WLFI insists the drastic step was a protective measure against rampant phishing attacks, not an attempt to muzzle legitimate trading activity.
Freezing Wallets: A Protective Measure?
The cryptocurrency platform WLFI announced earlier this week that it had blacklisted 272 wallets, citing security concerns. According to WLFI, approximately 215 of these wallets were compromised in a phishing attack, while another 150 fell prey to security breaches through support channels. However, the inclusion of Justin Sun’s wallet has raised eyebrows across the crypto community. The company claims, “WLFI only intervenes to protect users, never to silence normal activity,” a statement it reiterated in a post on X (formerly known as Twitter).
Interestingly, Justin Sun’s WLFI address was frozen after he conducted several transfers between his wallets. These were described as “dispersion test” transfers, following the unlocking of tokens at the launch. Despite appearances, onchain data suggests these transfers were not sales but rather routine movements of assets. This comes in the wake of Binance becoming the first exchange to list the Trump-linked WLFI token, which added a layer of complexity to the market dynamics.
Unpacking the Data
Nansen founder Alex Svanevik has shed light on the timing of Sun’s transactions. According to Nansen’s data, Sun transferred 50 million WLFI tokens—valued at approximately $9.2 million—on September 4 at 09:18 UTC. Crucially, this was hours after WLFI’s token experienced its steepest drop, indicating that Sun’s transfer was more a reaction than a cause of the market turbulence.
Further analysis reveals a $12 million WLFI transfer from HTX to Binance by a third-party market maker. This transfer, part of a standard portfolio rebalance using HTX’s own capital, followed WLFI’s sharp declines and was too minor to influence a market with a daily trading volume exceeding $700 million. Here’s the catch: once these tokens entered Binance, their fate—whether sold or held—is anyone’s guess.
Pointing to a different narrative, market participants suggest the sell-off was driven by widespread shorting and dumping of WLFI across several exchanges. Onchain records support this theory, with Nansen highlighting a crucial transfer from BitGo to Flowdesk that coincided with the start of WLFI’s decline, marking it as a pivotal moment in the market downturn. For those looking to capitalize on the shifting market, 3 altcoins are poised to benefit from investor interest in WLFI.
Market Sentiment and Future Implications
WLFI’s decision to freeze funds connected to the crash has unnerved whales, market makers, and trading desks alike. “If they can do it to Sun, who’s next?” captures the sentiment of those fearing their assets could be similarly frozen, as one insider related to CoinDesk.
Currently trading at $0.18 according to CoinGecko, WLFI is down 40% since its listing, a dramatic tumble that has left investors reeling. The broader implications of WLFI’s actions raise questions about the balance between security and investor confidence. Can platforms like WLFI maintain trust while exercising such control, or will this spark a shift in how centralized exchanges handle security breaches?
With market participants on edge, the crypto world watches closely. The precedent set by WLFI could shape future responses to security threats and determine whether other platforms will adopt similar measures. As these events unfold, the crypto community remains vigilant, contemplating the ramifications of these protective interventions. Could this be the beginning of a new era of centralized control in cryptocurrencies, or just a temporary blip in the wild west of digital finance? The answers remain to be seen.
Source
This article is based on: ‘If They Can Do It to Sun, Who’s Next?’ Say Insiders as WLFI Claims Freeze Was to ‘Protect Users’
Further Reading
Deepen your understanding with these related articles:
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- Underground Market Pays $20K a Month for Crypto ‘Vishing’ Scams
- Wall Street Giants Poised to Offer Spot Bitcoin and Ethereum Trading
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
