Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false representations, and issued threats against him. The lawsuit, which was filed on Tuesday, asserts that World Liberty's actions constitute an 'illegal scheme to seize property' in the form of Sun's tokens, which he claims to have purchased after being approached by the company's team in 2024. According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's purported commitment to promoting decentralized finance, an issue close to his heart, as well as the involvement of the Trump family.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. The lawsuit alleges that World Liberty requested Sun to continue investing in 2025, including a proposal to mint the company's USD1 stablecoin. However, when it became apparent that Sun would not invest on their terms, the company's principals allegedly became hostile towards him. The lawsuit claims that World Liberty misled investors, including Sun, through false statements about the economic rights and liberties associated with purchasing $WLFI tokens.
These alleged misrepresentations include statements regarding token holder rights, public statements by World Liberty or its executives about governance rights, and claims about the 'freedom to transact.' The lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance company, exerted centralized control over its tokens. According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to introduce 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 lawsuit claims that World Liberty's freezing of Sun's tokens served two purposes: coercing him into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and manipulating the market price of $WLFI tokens by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, World Liberty artificially inflated the market price of $WLFI tokens held by the company's founders and treasury.
The lawsuit raises regulatory concerns, suggesting that World Liberty's 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. The complaint also alleges that World Liberty made threats against Sun and his businesses, including a claim by co-founder Chase Herro that he would burn Sun's $WLFI tokens if Sun did not request their destruction. Herro also allegedly threatened to report Sun to U.S.
authorities, citing inadequate know-your-customer documentation. Portions of the lawsuit have been redacted, with an attached filing citing a confidentiality provision and offering the World Liberty team an 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 who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15.
Since Trump took office, Sun has visited the U.S. after previously avoiding the country, including attending a Trump-linked crypto project dinner last year. Recently, Sun 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 administration.