A fresh wave of controversy has struck the crypto markets as World Liberty Financial (WLFI), a project linked to US President Donald Trump, faces serious accusations of withholding investor funds. Croatian blockchain developer Bruno Skvorc, known for his work on Ethereum 2.0 and founder of RMRK, claimed that WLFI froze his token allocation and refused to release them.

In a post on X (formerly Twitter) over the weekend, Skvorc revealed an email exchange with WLFI’s compliance team. The team flagged his wallet address as “high risk,” citing past blockchain exposures and informed him that his tokens would remain locked. “TLDR is, they stole my money,” he wrote, branding the project a “new age mafia” and stressing that due to its ties with the President’s family, he had no avenue for recourse.

Six Investors Impacted by Total Lockup

Skvorc claimed he was not the only victim, stating that at least six investors experienced complete token lockups. According to him, WLFI initially accepted investments from the flagged addresses without issue. However, once the tokens were due for release, the compliance framework labelled the same wallets as too risky to receive payouts.

“It was not ‘high risk’ to accept money from this address, but it is high risk to unlock owed money into it,” Skvorc commented, highlighting what he viewed as an arbitrary and self-serving application of compliance rules.

The issue has raised serious concerns over transparency, investor protections and the credibility of WLFI, especially given its political connections.

Flaws in Compliance Tools

The incident sparked broader debate within the crypto community about the reliability of blockchain compliance tools. Onchain investigator ZachXBT noted that automated compliance systems frequently mislabel wallets as “high risk” for tenuous reasons. These can include interactions with decentralised finance (DeFi) protocols, minor exposures several hops away from sanctioned wallets, or past use of privacy-preserving mixers such as Tornado Cash.

“I helped a team manually review addresses for a presale because popular compliance tools labelled them high risk due to unrelated activity several hops away,” ZachXBT explained. “These tools are deeply flawed.”

In Skvorc’s case, his wallet was flagged due to historical links with Tornado Cash, indirect ties to sanctioned exchanges such as Garantex, Netex24 and prior interactions with a now-blacklisted dashboard. While these do not necessarily imply illicit activity, automated systems marked his address as too risky to handle.

Justin Sun Also Locked Out

Adding further fuel to the fire, Tron founder Justin Sun disclosed on Friday that his WLFI allocation had also been frozen. According to blockchain trackers, Sun’s wallet was blacklisted after a $9 million transaction triggered speculation that he was offloading tokens. In response, WLFI’s compliance filters froze his holdings.

Sun denounced the freeze as “unreasonable,” arguing that it contradicted the very principles on which blockchain is built. “Tokens are sacred and inviolable,” he wrote on X, urging WLFI to lift the restrictions immediately. His comments amplified industry concerns that WLFI’s compliance measures may be weaponised against investors.

Questions Over WLFI’s Credibility

The fallout raises pressing questions about WLFI’s credibility and governance. While compliance with global financial regulations is a necessary safeguard against money laundering and sanctions breaches, critics argue WLFI’s approach lacks proportionality and transparency. The project’s alleged willingness to accept funds from flagged wallets but deny them withdrawals has been perceived as a double standard.

For Skvorc and others, the issue highlights a broader vulnerability in blockchain projects that mix politics, finance and automated oversight. With both high-profile developers and prominent figures like Justin Sun affected, WLFI faces mounting pressure to clarify its policies and restore investor confidence.

Whether WLFI can repair its reputation or will become a case study in compliance gone wrong remains to be seen. For now, it stands at the centre of a storm combining politics, technology and investor trust.