Headline: WLFI threatens Justin Sun with lawsuit after public spat over $75M DeFi loan
WLFI, the crypto project reportedly linked to Donald Trump, escalated its dispute with Tron founder Justin Sun into a possible legal battle late Sunday. The project took to X (formerly Twitter) to fire back at Sun, saying it has “the contracts,” “the evidence” and “the truth” — and adding the pointed admonition: “See you in court, pal.”
The blowup centers on Sun’s accusations that WLFI treated users “as a personal ATM” after the project deposited 5 billion WLFI tokens as collateral on DeFi lending platform Dolomite and borrowed roughly $75 million in stablecoins. “Every action taken by the WLFI team to extract fees from users and to treat the crypto community as a personal ATM is illegitimate,” Sun wrote on X.
WLFI’s post framed Sun as making “baseless allegations” and accused him of playing the victim. The legal threat followed Sun’s resurfaced criticism of WLFI’s governance and capital use, turning what had been a governance dispute between an early backer and a protocol into a public confrontation that could head to court.
The feud goes back months. In September WLFI froze some of Sun’s WLFI tokens, alleging Sun attempted to sell tokens to “cash out early.” Sun denied those claims and pointed to on-chain data supporting his version of events. He also demanded transparency: “As the largest investor in this project, I demand that those responsible come forward by name, instead of hiding in the shadows,” Sun wrote.
The confrontation is notable not only for the dollar sums involved but for the relationship between the parties. Less than a year ago, WLFI publicly credited Sun for helping the project gain traction at Consensus Hong Kong. “This guy,” WLFI co-founder Zak Folkman said onstage, “saw that regardless of the outcome, this project is a monumental move forward for the entire crypto community.”
The dispute highlights recurring tensions in DeFi around collateral use, governance rights, and the power dynamics between projects and early investors. With both sides publicly staking their claims and WLFI threatening legal action, the episode will be one to watch for precedent-setting outcomes around protocol control and investor disputes in decentralized finance.
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