World Liberty Financial draws backlash over WLFI token lockup

World Liberty Financial posted a governance proposal on Wednesday to extend locks on WLFI tokens held by early investors. The plan would add two years to existing lockups, then release tokens in batches over a further two years.

The proposal states tokenholders who do not accept the new schedule would “continue to have their tokens locked indefinitely.” The company said voting on the proposal will begin soon and run for one week.

Justin Sun, an adviser to the project who describes himself as its largest investor, wrote on X that the plan is “one of the most absurd governance scams I have ever seen.” He accused World Liberty of coercion by proposing to freeze the votes of holders who oppose the schedule and said his own 4% stake is frozen. Sun wrote that many other large holders are in similar positions and may be unable to vote.

Other crypto figures criticized the proposal. Simon Dedic, founder of venture firm Moonrock Capital, wrote that early WLFI investors “who thought they were sitting on solid profits just got rugged.” The platform previously denied claims that it has special powers to blacklist wallets.

A company spokesman, David Wachsman, wrote in an emailed statement that the proposal “was designed to further align all the participants in the WLFI ecosystem for the long run.” He also confirmed the weeklong voting window will open soon.

The WLFI token has struggled since its debut. The price traded around $0.08 over the past 24 hours and is down more than 40% year to date. WLFI fell more than 75% from its all-time high of $0.33, reached on Sept. 1, the token’s first day of public trading after holders voted to allow trading.

World Liberty Financial, a crypto venture associated with the Trump family, has faced investor scrutiny previously. The upcoming vote will determine whether the proposed lockup schedule is adopted and how the platform proceeds with its token distribution plan.