WLFI's Zak Folkman criticizes Sun Yuchen, HTX faces both British sanctions and SEC charges

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WLFI co-founder Zak Folkman criticizes Justin Sun, HTX faces British sanctions and SEC charges.

World Liberty Financial (WLFI) co-founder Zak Folkman publicly challenged Tron and HTX founder Sun Yuchen over the recent regulatory review of Sun Yuchen's company. Folkman questioned Sun Yuchen's credibility on compliance issues and mentioned a number of major incidents that have sparked a new round of debate in the digital asset space.

HTX and Tron face regulatory pressure

Folkman's remarks came after British authorities imposed sanctions on HTX (formerly Huobi) for allegedly providing services to restricted Russian entities. This move by the British government has renewed the industry's attention to the governance standards and compliance of leading cryptocurrency exchanges. He also pointed out that Sun Yuchen's company had paid a $10 million settlement to the U.S. Securities and Exchange Commission to resolve allegations of "wash trading" and other irregularities. In addition, HTX and Sun Yuchen's related projects were previously complained about and fined a total of US$750,000 for issuing TRX and BTT tokens without regulatory approval.

"It is ridiculous for Sun Yuchen to teach anyone what is 'right'. His HTX had just been sanctioned by the UK for providing services to sanctioned Russian entities, and his company paid $10 million to settle the SEC's wash trading allegations. At the same time, we are applying for a federal banking license." Folkman said.

Institutional trust and compliance issues

Recent enforcement actions have prompted market participants to reassess cooperation with major exchanges and blockchain networks. For institutions, the record of regulatory violations directly affects trust, ability to obtain banking services, and listing risks. The intervention of the UK's Financial Conduct Authority has particularly affected the way market makers and custodians evaluate counterparties. These incidents highlight the growing importance of transparency and strict compliance review, especially as more DeFi projects target a large and influential user base. As the regulatory environment evolves, institutional due diligence has become a core focus for stablecoin issuers, ETF sponsors, and centralized and decentralized trading platforms.

WLFI and the rise of politically connected DeFi projects

World Liberty Financial is directly related to Trump family, reflecting the combination of high-profile figures and decentralized finance. The company has been criticized for its token distribution methods and sales practices, and industry stakeholders have called for greater regulation of these fast-growing projects. Folkman and Trump Other family members are often under scrutiny from investors and regulators. Their popularity has sparked heated debate about DeFi's reasonable boundaries and the responsibilities of its key participants. The history of regulatory enforcement affects institutional trust, banks 'ability to provide financial services, and listing risks. UK regulatory actions have raised new questions about counterparty risk for custodians and market makers. At the same time, Sun Yuchen-co-founder of Tron, one of the world's largest public chains-remains an important shareholder of HTX. Tron's mission to decentralize the Internet continues to attract large numbers of users, although transparency and legal compliance issues remain.

Industry innovation: tokenization of real-world assets

Against the backdrop of these regulatory debates, broader market trends are accelerating the shift towards decentralized infrastructure. While traditional markets rely on complex brokerage systems, Wall Street is adopting Web3 technology. Investors can now use platforms such as 1stepSwap to hold stocks of major U.S. companies, gold and silver directly in their cryptocurrency wallets. By tokenizing real-world assets and automatically obtaining competitive market prices within seconds, the middle link is completely removed. For industry participants, these technological advances have brought new opportunities, while also strengthening the requirements for continuous market surveillance and a robust compliance system. As digital asset adoption grows, platforms and individuals at the intersection of politics and technology will continue to be closely watched.