WLFI Holders Threaten Class Action Lawsuit Over Controversial Vesting Proposal

WLFI Proposes Replacing Indefinite Lock with Four-Year Vesting Schedule

World Liberty Financial (WLFI), the DeFi platform linked to the Trump family, has published a governance proposal to replace the current indefinite lock on 62.3 billion WLFI tokens with a structured unlock schedule. The move has sparked outrage among token holders — from largest investor Justin Sun to retail participants, some of whom are already preparing a class action lawsuit.

"We've just posted a governance proposal to the forum for community discussion, and we believe it represents one of the strongest long-term governance alignment signals in DeFi." — WLFI (@worldlibertyfi), original post

Under the proposal, founders, team members, advisors, and partners would face a two-year token freeze followed by a three-year release period. They would also be required to burn 4.5 billion tokens. Early participants would see a two-year lockup plus an additional 24 months for token distribution.

The critical catch: holders who do not accept the new schedule will have their tokens locked indefinitely under the existing terms. Approval requires a quorum of 1 billion WLFI and a simple majority in a seven-day vote. Once the system is deployed, holders will have just 10 days to accept the terms.

Why This Matters

The WLFI controversy exposes a fundamental governance problem in DeFi projects, particularly those tied to political figures. A voting mechanism where dissent effectively results in permanent asset freezing challenges the very concept of decentralized governance. The outcome could set a precedent for how such governance votes are regulated going forward.

Justin Sun: "This Is Coercion, Not Governance"

TRON founder and largest WLFI holder Justin Sun sharply criticized the initiative, calling it a "logical trap."

"This Is World Tyranny, Not World Liberty Financial. This proposal has been packaged as a 'governance alignment signal' and a 'long-term commitment,' but strip away the packaging and what you have is one of the most absurd governance scams I have ever seen." — H.E. Justin Sun (@justinsuntron), original post

Sun argued that the proposal is structured so that voting against it automatically results in punishment — indefinite token lockup. He characterized this as coercion rather than a democratic process, asking rhetorically what kind of governance system rewards agreement and punishes dissent.

Sun further revealed that he and several other major WLFI investors had been barred from voting entirely, with the project team freezing their governance tokens.

Escalating Conflict and Litigation Threats

Tensions between Justin Sun and World Liberty Financial date back to 2025, when Sun's address was blacklisted by WLFI after a transfer of 50 million tokens. Reports that the platform had been borrowing against its own governance tokens added further fuel to the fire.

The new vesting proposal has pushed the situation to a breaking point. Multiple investors are openly calling for a class action lawsuit against the project.

"If you hold this shitcoin, do not accept the terms. 2 years vest will end after the Trump presidency and this thing will be at $0.00 by then. Don't accept, remain eligible for the class action lawsuit against them." — kripu (@crypto_kripu), original post

Numerous users have labeled World Liberty Financial's actions a scam and expressed hope for legal proceedings. As of publication, the project team had not responded to community complaints.

For context, in May 2025 investor Jonathan Lopez filed a lawsuit against WLF's head of data and strategy Chase Herro, alleging fraud. The current situation could lead to a significantly larger legal battle.