Family, who understands! The crypto world is never short of crash scenes, but to let a big shot freeze 60 million dollars outright, we have to look at WLFI's operation. TRON founder Sun Yuchen has been blacklisted by this project for three months, and not only has the ban not been lifted, but the locked tokens have directly evaporated 60 million in value, leaving only 74 million in estimated holdings now. This massive loss has left me dumbfounded 🤯.
First, let the new fans have a brief recap, while the old fans can skip to the highlights: In September this year, WLFI, backed by the Trump family, suddenly initiated a wave of 'security cleanup', freezing 272 wallet addresses all at once, claiming it was to 'prevent phishing and suspicious activities'. At the time, the community was in an uproar, as this wave of freezes involved a considerable amount of money, and the most eye-catching was the wallet associated with Sun Yuchen, which was revealed by on-chain analysts (Bubblemaps and Arkham) and marked as 'suspected of misappropriating funds', which led to it being blacklisted by WLFI.
Here we must insert a valuable knowledge point: Many people think that a 'frozen wallet' just means you can't trade temporarily, but little do they know that when a token crashes, unrealized losses can hurt you deeply. Sun Yuchen's case is a typical example; on-chain data shows he held 545 million WLFI, and when it was frozen in September, its valuation was 60 million higher than now, which has now directly shrunk to 74 million. Ironically, the WLFI team has been insisting 'it’s not targeting individuals, just protecting users,' but anyone with a discerning eye can see that the timing of this freeze was too subtle, coinciding perfectly with Sun Yuchen transferring out a sum of 9 million dollars worth of tokens, and at that time the market was already in chaos due to the inaccurate disclosure of WLFI's circulation (the actual circulation is five times the expected).
As an analyst with many years of experience in the crypto space, I must say a hard truth: On the surface, this matter is about 'security freeze,' but in essence, it is a major exposure of the lack of transparency in DeFi governance! Firstly, the WLFI project has been fraught with pitfalls from the very beginning; 80% of the early tokens were locked, and only 20% were circulating. It was originally relying on 'scarcity' to create hype, and then suddenly changed the circulation volume before issuance, leading to a direct drop of over 40% when the token was listed. As an early investor (having poured in 75 million dollars and still acting as an advisor), Sun Yuchen most likely wanted to profit from this early hype, but as soon as the transfer test was completed, he was caught as a 'typical' example by the project party.
Interestingly, Nansen's AI analysis had long indicated Sun Yuchen: his transfers occurred after the token's crash, and the real cause of the drop was the market makers' coordinated shorting and the release of 40.8 million tokens by BitGo. But WLFI remains tight-lipped, firmly locking Sun Yuchen's wallet until now. I reasonably suspect this operation is a 'shift of contradictions'—after all, the project's governance itself is chaotic, dragging a big shot out as a scapegoat conveniently masks its own issues of inaccurate disclosures and poor risk management.
A reminder to all retail investors: The core lesson from this event is that 'locked tokens are not a safe deposit box!' Especially for those projects with celebrity endorsements and vague governance rules, the longer the tokens are locked, the greater the risk of losses when encountering black swan events. Sun Yuchen's 60 million loss, in plain terms, is simply due to 'overtrusting the project party + ignoring the liquidity risks of locked tokens.' You thought investing alongside big shots would guarantee profits, but in the end, even the big shots are being ground down by the project party.
To put it bluntly, this matter is far from over: Sun Yuchen still has 2.4 billion locked WLFI that has not been unlocked, and the current valuation evaporation of 60 million is just the beginning. If WLFI continues to drop, the losses will only be more severe. Moreover, this operation of 'blacklisting big shots' has already raised doubts about the governance credibility of DeFi projects. If today they can casually freeze Sun Yuchen's wallet, will it be the turn of ordinary retail investors tomorrow?
