The governance token of World Liberty Financial (WLFI) has dropped to a new all-time low of $0.07, following reports that the platform utilized its tokens as collateral for loans. This decision has drawn significant criticism from investors and the crypto community, particularly from Justin Sun, founder of the Tron blockchain network, who claimed to have invested considerable funds in WLFI as an early backer.
Sun expressed concerns over the transparency of WLFI's governance procedures, particularly regarding a proposal from March that determined token lock-up periods. He noted that over 76% of the voting tokens came from just ten wallets, suggesting that this concentration of power undermined fair voting practices. In a post on X, Sun accused WLFI of withholding information and restricting meaningful participation in governance.
In response, WLFI dismissed Sun's allegations as unfounded and threatened legal action against him. The platform has stated it acts as an “anchor” borrower to generate yield for its ecosystem and maintain value for token holders. The controversy comes amidst ongoing scrutiny of WLFI and its connection to the Trump family, raising further concerns about the integrity of its operations.