Trump’s Crypto Venture Faces Backlash Over Insider Token Maneuver

World Liberty Financial, the cryptocurrency project co-founded by members of the Trump family, is dealing with a serious credibility problem

Written by: Sophia Cruz • Monday, April 13, 2026 • 2 min read

• Last updated: Monday, April 13, 2026

Quick overview

World Liberty Financial, co-founded by Trump family members, is facing credibility issues after a major investor publicly criticized its practices.
Justin Sun, a key backer, accused the project of enabling insiders to freeze token holders' funds and described it as a deceptive trap.
The project has also been scrutinized for borrowing $75 million against its own tokens, raising concerns about potential conflicts of interest and financial stability.
The WLFI token has plummeted over 80% from its peak, and House Democrats are questioning the implications of the Trump family's involvement in crypto policy.

World Liberty Financial, the cryptocurrency project co-founded by members of the Trump family, is dealing with a serious credibility problem. One of its biggest backers has turned on it publicly, and a financial move involving the project’s own tokens has drawn comparisons to some of the industry’s worst recent failures.

Justin Sun, the billionaire founder of the Tron blockchain network and one of the project’s earliest and largest investors, went public with his grievances over the weekend. He accused World Liberty of quietly building in controls that allow insiders to freeze token holders’ funds without notice. Sun, who holds roughly 545 million WLFI tokens worth around $43 million, described the project on social media as a trap dressed up as an opportunity. World Liberty fired back, calling his claims baseless and hinting at legal action.

The dispute erupted against the backdrop of a separate controversy that had already been brewing. Blockchain data confirmed that World Liberty’s treasury deposited approximately five billion of its own WLFI governance tokens as collateral into Dolomite, a lending platform with ties to one of the project’s executives, and borrowed around $75 million in stablecoins against them. Critics were quick to point out that borrowing heavily against your own token, on a platform you have a hand in running, is the kind of circular arrangement that contributed to the collapse of FTX in 2022.

The WLFI token has not been spared. It hit an all-time low this past week, down more than 80% from the peak it reached last September. The borrowing activity also pushed Dolomite’s USD1 lending pool close to capacity, leaving some depositors unable to withdraw their funds.

The episode is drawing attention beyond crypto circles. House Democrats have raised conflict-of-interest concerns, noting that the Trump administration has been actively shaping U.S. crypto policy while the family holds a direct financial stake in the sector.

World Liberty has not provided a detailed account of how the borrowed funds are being used.

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ABOUT THE AUTHOR See More

Sophia Cruz

Financial Writer - Asian & European Desks

Sophia is an experienced writer, reporter and newsdesk member, mostly on the financial sectors. For the past 5 years Sophia has covered a wide variety of topics such as the financial markets, economics, technology, fin-tech and trading. Sophia has been a part of the FX Leaders team since 2017 and works on producing valuable content and information for traders of all levels of experience.