Tron founder Justin Sun has initiated a lawsuit 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 representations, and defamed him. The lawsuit, which mentions Sun's support for Trump, alleges that World Liberty's leadership engaged in an 'illegal scheme to seize property' in the form of Sun's tokens, which he claims to have purchased after being solicited by the company in 2024.
At the time of the investment, Sun allegedly put in $45 million to buy $WLFI tokens, drawn in by the project's claims of promoting decentralized finance and its connection to the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit. According to the filing, World Liberty asked Sun to continue investing in 2025, including a request to mint the company's USD1 stablecoin. However, when it became clear that Sun would not invest on their terms by July 2025, the relationship turned hostile.
The lawsuit alleges that World Liberty used 'fraudulent misrepresentations and omissions' to induce Sun's investments, including statements about token holder rights, governance, and the freedom to transact. Sun's suit also claims that despite presenting itself as a decentralized finance business, World Liberty maintained centralized control over its tokens.
The company allegedly modified the $WLFI smart contract in August 2025 to add a 'blacklisting' function without informing investors, which allowed them to freeze tokens in specific wallets. This change was made without a governance vote, even as token holders had just approved a proposal to make part of the token supply tradable. The complaint suggests that freezing Sun's tokens served two purposes: to pressure him into minting $200 million of the USD1 stablecoin on the Tron blockchain and to manipulate the $WLFI market price by preventing one of the largest holders from selling.
By doing so, World Liberty artificially supported the market price of $WLFI tokens held by its founders and treasury, according to the lawsuit. The company's ability to issue, freeze, and reassign tokens may not only contradict its decentralization claims but also raise regulatory concerns, potentially qualifying it as a money transmitter under U.S.
Financial Crimes Enforcement Network rules. This could subject the firm to registration and anti-money laundering requirements. Other allegations include threats made by World Liberty's co-founder, Chase Herro, to burn Sun's $WLFI tokens if Sun did not request their destruction.
Herro also allegedly claimed that Sun's know-your-customer documentation was inadequate and threatened to report him to U.S. authorities.
Parts of the lawsuit have been redacted, with Sun's team giving World Liberty the opportunity to decide whether these provisions should remain sealed. In a social media post, Sun stated that he had attempted to resolve the situation in good faith and sought equal treatment as other early investors. He also expressed opposition to a new governance proposal published by World Liberty.
Since Trump's presidency, Sun has visited the U.S. and was a guest at a Trump-linked crypto project dinner. Recently, Sun settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine.