WLFI’s development team said its dispute with Justin Sun will be settled in court, addressing him directly on X and stating that it holds contracts and documents to support its position. The legal threat followed Sun’s accusation that the team misused user funds, pointing to a transaction in which 5 billion WLFI tokens were posted as collateral on Dolomite to borrow about $75 million in stablecoins. Sun said the project had treated the crypto community like a personal ATM.
Loan structure and fund use sit at the center of the clash
The dispute is centered on a DeFi borrowing arrangement and what happened after the stablecoins were obtained. In Sun’s account, WLFI used a large token position as collateral and then handled the borrowed funds in a way that raised serious concerns. WLFI did not concede those claims in its public response. Instead, it said the matter would be decided by a judge and stressed that it has evidence to back its version of events. That shift made clear the conflict had moved past private disagreement.
Earlier token controversy has returned to the spotlight
The current fight also revived an earlier episode involving tokens tied to the WLFI project that were frozen. WLFI had accused Sun of trying to sell those tokens quickly, but the report said blockchain data did not substantiate that claim. Sun, for his part, publicly called on WLFI’s official account to reveal who was actually in charge. The argument now stretches beyond one borrowing transaction, touching token handling, account control, and the question of who is responsible for decisions inside the project.
A partnership once praised in public has broken down
The fallout has drawn added attention because the two sides were once aligned. Sun is widely known as the founder of the Tron ecosystem and a backer of multiple DeFi projects. WLFI, meanwhile, had gained visibility as a DeFi platform, especially after Sun’s involvement helped revive momentum around the project. At Consensus Hong Kong in 2023, WLFI publicly praised Sun and credited him with having a major impact on the platform’s growth.
The report also noted that WLFI co-founder Zak Folkman had previously described Sun’s vision as a major step forward for the crypto community. That relationship has now turned into an open public feud, with allegations and rebuttals still unfolding across social media. The legal process has begun to take center stage, but the outcome remains uncertain.