Sun Yuchen is suspected of "dumping" the Trump family project WLFI and has been blacklisted with a lock-up position? He claims to be innocent and is launching a "rights protection"!

Today, the world of Crypto Assets once again staged a dramatic “Game of Thrones.” The main characters of the event are on one side the controversial yet highly influential founder of TRON, Justin Sun, and on the other side the crypto project World Liberty Financial (WLFI), backed by the Trump family and carrying its own aura and traffic.

The trigger point of this incident was a thunderous move taken by the WLFI project team on September 4: they directly blacklisted the wallet address of one of the project's largest early investors, Sun Yuchen. This action instantly froze over $100 million worth of unlocked WLFI tokens in Sun Yuchen's wallet, as well as a significantly larger amount of locked tokens.

This move is like a deep-sea bomb, not only causing a cliff-like drop in the price of WLFI tokens but also sparking an intense debate across the entire industry regarding “centralized power,” “asset ownership,” and “market fairness.” Sun Yuchen, who has been thrust into the spotlight, quickly launched a massive “rights protection” campaign on social media, insisting that he is “innocent.”

Trigger of the event

The storm began with the fluctuations in on-chain data. The WLFI token officially launched for trading on September 1, with an initial price soaring to $0.39, but then it began to experience severe volatility. A few days later, on September 4, the on-chain data tracking platforms Nansen and Arkham keenly captured that a wallet address tagged as Sun Yuchen conducted a series of transfer operations to platforms such as Huobi (HTX), with the most notable transaction amounting to 50 million WLFI, equivalent to approximately $9 million at the time.

Shortly after this large transfer occurred, the WLFI project team took decisive action and blacklisted the address in the smart contract. This means that the address has completely lost the ability to transfer any WLFI tokens it holds. According to on-chain data, the frozen assets include approximately 595 million unlocked WLFI tokens (worth about $107 million) and around 2.4 billion tokens still in the lock-up period. The massive funds invested by Sun Yuchen were instantly “locked up.”

The actions of the WLFI team undoubtedly send a strong signal to the outside world. They believe that large holders or exchanges associated with large holders are trying to manipulate the market through large transfers or are preparing for a massive sell-off. Such behavior, during the early stages of the project when market liquidity is relatively weak, is enough to trigger a severe price collapse, which is extremely unfair to a large number of small and medium investors.

In fact, before the team took action, the price of WLFI had already experienced a significant decline, dropping to $0.16 at one point, a nearly 60% drop from its peak. To stabilize the coin price, the team announced on September 3 that they would destroy 47 million tokens and consider launching a buyback plan. Therefore, the move to freeze Sun Yuchen's address has been interpreted by outsiders as the project team's “ultimate self-preservation” strategy in the face of market panic.

However, this “parental” management approach immediately triggered further panic in the market. The price of WLFI plummeted more than 20% after the news broke, as investors suddenly realized that the project team has the absolute power to freeze any address at any time, and the so-called “decentralization” seems to have become a hollow phrase.

Sun Yuchen's “Innocence”

In response to the accusations of frozen assets and “market manipulation,” Sun Yuchen quickly launched a counterattack on the X platform (formerly Twitter), staging a crisis public relations performance.

First, he firmly denied it. He clarified in a post that the controversial $9 million transfer was merely “a few transactions of very low amounts for exchange recharge testing,” aimed at “address dispersion,” and during this period, “there were no buying or selling activities involved,” therefore, “it could not have had any impact on the market.” He emphasized that as a long-term supporter of the project, he has no plans to sell WLFI in the short term.

Then, he shouted “Innocent”. Sun Yuchen positioned himself as a victim, complaining, “As one of the early major investors in World Liberty Financials, what I invested was not only capital but also my trust and support for the future of this project… However, during the operation, my coins were unreasonably frozen.”

In the end, he rose to the height of principles and initiated “rights protection.” Sun Yuchen made a public appeal to the WLFI team, emphasizing that the private ownership of token assets is the most fundamental value of blockchain, which is “sacred and inviolable.” He pointed out passionately: “A great financial brand should be built on fairness, transparency, and trust, rather than freezing investors' assets. This unilateral action not only infringes upon the legitimate rights and interests of investors but also undermines external confidence in WLFI.” He demanded that the team respect principles and immediately unfreeze his tokens.

Trust and Power

The public confrontation between Sun Yuchen and the WLFI team has exposed the “centralized” core beneath the “decentralized” facade of many crypto assets projects. The core controversy of the event lies in whether the project party has the right to deprive users of their asset control in order to maintain the so-called “market stability.”

The community has also experienced serious divisions on this issue. Some people support the WLFI team, believing that this is a necessary measure taken in extraordinary times, effectively preventing potential whale sell-offs and protecting the interests of retail investors. However, another group feels a chill, believing that if the team can freeze Sun Yuchen today, they can freeze any address they deem “threatening” tomorrow. This unchecked power completely goes against the spirit of blockchain.

Critics point out that the high concentration of WLFI tokens is the root cause of this problem. According to statistics, about 83% of the tokens are controlled by entities related to Trump and early large holders, which gives the development team absolute dominance to modify the protocol and block addresses.

In conclusion, it is still uncertain whether Sun Yuchen's “rights protection” action will ultimately be successful. However, this incident undoubtedly serves as a wake-up call for the entire Crypto Assets industry. It acts as a mirror, reflecting the struggles many projects face between the ideal of decentralization and the reality of business. For investors, this is an enlightening lesson in risk education: before investing in any project, one should not only consider its prospects and team but also examine its token distribution structure and governance model, to understand how genuine its “decentralization” really is.

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