Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm backed by the Trump family, alleging that the company wrongly froze his $WLFI token holdings and made false representations. The lawsuit, filed on Tuesday, asserts that World Liberty's leadership engaged in an illicit scheme to seize Sun's tokens, which he claims to have purchased after being solicited by the company in 2024. According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's purported commitment to promoting decentralized finance, a cause close to his heart, as well as the Trump family's involvement with the project.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. The lawsuit alleges that 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 or mint USD1 on their terms, World Liberty's principals allegedly became hostile towards him. The lawsuit claims that World Liberty induced Sun to invest through fraudulent misrepresentations and omissions regarding the economic rights and liberties associated with purchasing $WLFI tokens.
These misrepresentations allegedly include statements about token holder rights, public statements by World Liberty or its executives regarding governance rights, and statements about the 'freedom to transact.' The lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, exercised centralized control over its tokens. According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors. The complaint asserts that this modification was not put to a governance vote and was not disclosed to investors, even as token holders had approved a proposal to make a portion of the supply tradable.
The lawsuit claims that World Liberty's freezing of Sun's tokens served a dual purpose: pressuring him to mint $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating $WLFI's market price by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, World Liberty artificially propped up the market price of $WLFI tokens held by World Liberty founders and the company's corporate treasury. The lawsuit raises regulatory questions, as World Liberty's ability to issue, freeze, and reassign tokens may qualify the firm as a money transmitter under U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
Other allegations in the complaint include that World Liberty made overt threats to Sun and his businesses. Chase Herro, one of World Liberty's co-founders, allegedly threatened to burn Sun's $WLFI tokens if Sun did not ask for his tokens to be burned. Herro also allegedly falsely claimed that the know-your-customer documentation submitted by Sun and his companies was inadequate and threatened to report Sun to U.S. authorities.
Portions of the lawsuit were redacted, with another filing attached to the lawsuit citing a confidentiality provision. Sun stated on social media that he had attempted to resolve the situation in good faith and wanted to be treated the same as other early investors who received tokens. He also expressed opposition to World Liberty's new governance proposal published on April 15. Since Trump took office, Sun has visited the U.S.
after previously staying away from the country and was a guest at Trump's first memecoin dinner last year. Sun recently settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.