The Great DeFi Heist: Sun Burns WLFI’s Trumpian ATM Scheme

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Markets

What to know, dear reader:

  • Ah, the fickle embrace of finance! Justin Sun, once the darling patron of World Liberty Financial, has now turned his gilded back on the project, accusing its architects of treating users like a “personal ATM”-a most vulgar metaphor, but alas, apt.
  • The drama unfurls as WLFI, in a move as audacious as it is questionable, deposited 5 billion tokens on Dolomite and borrowed $75 million in stablecoins, a transaction so grandiose it left ordinary depositors locked out, their funds as inaccessible as a wit in a room of fools.
  • Sun, whose wallet was frozen in 2025 (a chilling fate for any crypto enthusiast), now proclaims himself the “first and single largest victim,” a title he wears with the gravitas of a tragedian. He decries WLFI’s governance as neither fair nor transparent, as the token plummets to a modest $0.079-a fall as sharp as his own wit.

Behold, the Trump-linked World Liberty Financial has lost its golden goose, as Justin Sun, with a flourish of indignation, breaks ranks and lambasts the project’s treatment of investors. A spectacle, indeed!

“Every action taken by the WLFI team to extract fees from users and to treat the crypto community as a personal ATM is illegitimate,” Sun penned, his quill dripping with sarcasm.

I have always been an ardent supporter of President Trump and his crypto-friendly policy.

As an early supporter who invested heavily in World Liberty Financial, I did so because I believed in the vision that was presented to the public: a decentralized finance platform that…

– H.E. Justin Sun 👨‍🚀 🌞 (@justinsuntron) April 12, 2026

The fracas erupted days after WLFI deposited 5 billion WLFI tokens as collateral on Dolomite, borrowing $75 million in stablecoins-a sum so vast it dominated the protocol’s liquidity, leaving ordinary depositors as stranded as a dandy in a rainstorm without his umbrella.

The deposit still reigns supreme on Dolomite, accounting for the majority of the protocol’s $794 million in total supply liquidity. A dominance as absolute as a Wildean bon mot.

At its zenith, the USD1 pool hit 100% utilization, a peak so precipitous it temporarily locked out stablecoin depositors. As of Sunday, the pool had softened to 82% utilization, with $158 million borrowed against $193 million supplied-a slight reprieve, but hardly a triumph.

Dolomite co-founder Corey Caplan, who also advises WLFI (a dual role as tangled as a Wildean plot), raised the WLFI supply cap to 5.1 billion tokens to accommodate the deposit. A move as strategic as it is controversial.

“These actions have nothing to do with me,” Sun declared, his tone as icy as a London fog. “They have nothing to do with the investors who believed the promises this project made. We oppose every one of these actions in the strongest possible terms.”

Frozen out of WLFI

Sun, ever the savior, once stabilized the project by purchasing $30 million in WLFI tokens after a tepid launch. Yet, last September, WLFI froze his wallet, locking him out of 595 million tokens worth $107 million. A betrayal as bitter as a poorly mixed cocktail.

WLFI claimed the freeze was part of a broader move against 272 wallets linked to phishing attacks, insisting it “only intervenes to protect users, never to silence normal activity.” A defense as flimsy as a socialite’s excuse for tardiness.

Sun, however, frames the freeze as the project’s original sin, a wound he wears with the pride of a martyr. “I am the first and single largest victim,” he wrote, “as a result of their wrongful blacklisting of my WLFI token wallet back in 2025, that violates basic investor rights and blockchain principles of fairness.”

He also took aim at WLFI’s governance, alleging that votes were neither fair nor transparent, that key information was withheld, and that outcomes were predetermined. A critique as sharp as his own barbs.

Notably, Sun carefully separated his attack on WLFI’s operators from the President himself, reaffirming his support for Trump’s crypto-friendly policy and directing his denunciation at “the bad actors at WLFI.” A distinction as precise as a Wildean epigram.

WLFI’s co-founder Zak Folkman did not immediately respond to a request for comment. A silence as telling as a raised eyebrow at a society ball.

WLFi trades at $0.079, down 18% over the past week. A decline as inevitable as the fall of a house built on sand.

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2026-04-12 14:58