World Liberty Financial is facing a sharp investor backlash after proposing a governance plan that would keep early participants locked up for far longer than expected. Under the proposal posted Wednesday, the Trump family-backed crypto venture would extend the lock-up period by two more years, then release tokens in staggered batches over the following two years. The clause drawing the most criticism says holders who vote against the plan or refuse the new terms would have their tokens locked indefinitely.
Justin Sun calls the proposal coercive
The strongest criticism came from the project’s governance forum and from crypto entrepreneur and adviser Justin Sun. Sun, identified as the platform’s largest investor with a 4% stake, said on X that the plan was “one of the most absurd governance scams I have ever seen.” He argued that the structure amounts to coercion because tokenholders who disagree with management would be punished for doing so. Sun also said his own holdings are currently frozen, which would prevent him from taking part in the vote that could determine the fate of that investment.
Early backers say expected liquidity keeps moving away
Moonrock Capital founder Simon Dedic raised similar objections. He said early supporters who expected eventual liquidity are instead being “rugged.” Dedic also pointed to the four-year timeline itself, saying it appears to line up with the length of the current political term, and argued that the move lets project leadership keep extracting value from a story they have been promoting for the past two years.
WLFI’s market action has offered little relief. The token was flat at $0.08 over the last 24 hours, but the broader trend remains weak. Since reaching an all-time high of $0.33 in September, the asset has lost more than 75% of its value.
Governance dispute lands as Dolomite scrutiny continues
The lock-up fight is unfolding at the same time as questions over the project’s balance-sheet activity on Dolomite. According to the report, World Liberty Financial deposited 5 billion WLFI tokens as collateral to borrow $75 million in stablecoins. That position pushed utilization in Dolomite’s USD1 lending pool to nearly 100%, leaving other depositors unable to withdraw because available liquidity had been exhausted.
With the lock-up proposal and the Dolomite collateral controversy now overlapping, tokenholders are focused on one immediate issue: if the new schedule is approved, dissenting investors may face not just delayed liquidity, but no clear exit path at all.