World Liberty Financial’s (WLFI) token plunged after aggressive shorting and cross-exchange dumps, not because of transfers between Justin Sun’s wallets, onchain analysis shows. WLFI froze 272 addresses this week, saying most were tied to phishing compromises.
“WLFI only intervenes to protect users, never to silence normal activity,” the project wrote on X after the blacklists drew criticism.
Researchers at Nansen — and its founder Alex Svanevik — highlighted that Sun moved about 50 million WLFI (≈$9.2M) on Sept. 4 at 09:18 UTC, several hours after the token’s steepest drop, indicating those transfers followed the crash rather than triggered it. Separate onchain traces show a $12M WLFI transfer from HTX to Binance by a market maker that also occurred after the sell-off began.
Onchain records flagged a BitGo-to-Flowdesk transfer that lined up with the start of WLFI’s slide — a pattern market participants say points to coordinated shorting and large desk-driven dumps across exchanges, not a single whale sale. WLFI’s daily trading volume exceeds $700M, which makes the timing and coordination of exchange flows important to understanding price impact.
The blacklist stirred alarm among exchanges, whales and trading desks worried about custody and counterparty risk. One market insider told CoinDesk, “If they can do it to Sun, who’s next?” WLFI traded around $0.18 and is down roughly 40% since listing, per CoinGecko.
Risk reminder: abrupt token freezes and heavy shorting amplify volatility and create execution and custody risk for traders. Monitor exchange flows and onchain alerts before trading.
Source: CoinDesk. Read the original coverage for full details.