The $500 million assets of cryptocurrency tycoon Sun Yuchen were frozen overnight, triggering a trust war regarding decentralized finance.
In early September, the cryptocurrency world was rocked by a storm. TRON founder Sun Yuchen suddenly faced the 'on-chain black hand' of the WLFI project team, with $500 million worth of tokens being instantly frozen.
This incident revealed the true nature of many DeFi projects' 'pseudo-decentralization'—while superficially claiming to be decentralized, they actually rely on centralized privileges for control.
1. Lightning freeze, $500 million assets paralyzed instantly
The incident originated on September 4, when Sun Yuchen's Ethereum wallet transferred 50 million WLFI tokens to the HTX exchange. Almost simultaneously with the transfer, the WLFI project team immediately banned that address through the smart contract's 'blacklist' feature.
This action has resulted in all 545 million WLFI tokens and 2.4 billion locked tokens in Sun Yuchen's wallet being permanently frozen, totaling a value of up to 900 million dollars.
2. Public backlash ignites community anger.
Sun Yuchen's rights protection campaign first ignited in the arena of public opinion. He posted 8 tweets continuously, condemning from 'crypto freedom' to 'centralized tyranny', with the sharpest one stating: 'They froze my 500 million dollars, but they can't freeze my belief in decentralization!'
He warned all large holders: 'If they can freeze me today, they can freeze you tomorrow!' This tweet went viral within half an hour, with over 100,000 retweets, completely igniting public opinion in the cryptocurrency circle.
3. Legal blow, a sky-high claim of 550 million dollars.
Sun Yuchen subsequently formally sued the WLFI project party in Delaware court for 'breach of contract + infringement', claiming as high as 550 million dollars, including the value of the frozen tokens and market losses.
The core accusations in the lawsuit are twofold: first, the 'non-discriminatory freeze clause' stated in the white paper is now specifically targeting large holders, clearly in breach of contract; second, the freeze caused him to miss the 'strategic investment window' and even demands compensation for 'mental suffering'.
4. Regulatory crackdown, targeting the Trump family.
The SEC has intervened to retrieve WLFI's locked asset records and the Trump family's transaction records.
5. The truth is revealed, the true nature of pseudo-decentralization is exposed.
The WLFI project is endorsed by the Trump family, claiming decentralized finance, yet it arbitrarily freezes assets through a built-in 'blacklist' function.
This 'admin key' function gives the project team supreme power, allowing them to suspend transactions, upgrade contracts, and even directly freeze user assets—no different from traditional centralized institutions.
6. A storm of blood and bloodshed, market trust has completely collapsed.
The price of WLFI tokens plummeted by 20%, dropping from around $0.46 at the beginning of the listing to about $0.18, with a market value shrinkage of over 40%.
The community is in serious division: one side accuses Sun Yuchen of secretly dumping tokens, while the other side criticizes WLFI's actions as excessive, violating the spirit of blockchain decentralization.
Ordinary retail investors are in panic: if even a large holder like Sun Yuchen can be frozen at will, how can their asset safety be guaranteed?
Legal experts analyze that Sun Yuchen may partially win the case but find it difficult to obtain full compensation; market trust has been severely damaged, and WLFI's price continues to remain sluggish.
The Trump team is reported to be pressuring the project party to publicly disclose governance reforms, fearing it could affect the 2026 election, and may even sell to stop losses.
Regardless of the outcome, Sun Yuchen has ripped off the facade of 'pseudo-decentralization'. This struggle serves as a warning to the entire industry: true decentralization is not just a slogan, but must be a practice that does not rely on privileged manipulation.
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