Tron founder Justin Sun has taken legal action against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, claiming the company froze his $WLFI token holdings without justification, made false promises, and threatened him. The lawsuit, which was filed on Tuesday, asserts that World Liberty's actions constitute an 'illegal scheme to seize property' and that the company's leadership engaged in fraudulent behavior. According to the suit, Sun invested $45 million in $WLFI tokens after being approached by World Liberty in 2024, partly due to the project's connection to the Trump family and its purported commitment to promoting decentralized finance.
However, when Sun declined to continue investing in 2025, including a request to mint the company's USD1 stablecoin, World Liberty's attitude towards him allegedly became hostile. The lawsuit claims that World Liberty misled investors, including Sun, about the rights and freedoms associated with purchasing $WLFI tokens, and that the company exerted centralized control over its tokens despite presenting itself as a decentralized finance business.
It is alleged that World Liberty modified the smart contract governing $WLFI in August 2025 to include a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors or putting it to a governance vote. The complaint argues that this modification enabled World Liberty to freeze Sun's tokens, which served the dual purpose of pressuring him to mint $200 million of the company's USD1 stablecoin and artificially propping up the market price of $WLFI tokens held by World Liberty's founders and treasury.
The lawsuit also raises concerns about World Liberty's regulatory status, suggesting that its ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
Additionally, the complaint alleges that World Liberty made threats against Sun and his businesses, including a claim that one of the company's co-founders, Chase Herro, threatened to burn Sun's $WLFI tokens and report him to U.S. authorities over allegedly inadequate know-your-customer documentation.
Sun has stated that he tried to resolve the situation amicably and seeks to be treated equally to other early investors who received tokens. The lawsuit comes after Sun settled charges with the U.S. Securities and Exchange Commission last month, agreeing to pay a $10 million fine.