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 claims, and threatened 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 decentralized finance, an issue close to his heart, as well as its connection to the Trump family.
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 comply with their terms by July 2025, the company'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 associated with purchasing $WLFI tokens.
These alleged misrepresentations include statements about token holder rights, public statements by World Liberty or its executives about governance rights, and claims about the 'freedom to transact.' Sun's lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, maintained centralized control over its tokens. The complaint states that 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 or putting it to a governance vote. The lawsuit claims that World Liberty's freezing of Sun's tokens served two purposes: pressuring him to mint $200 million of the company's USD1 stablecoin on his 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 its corporate treasury. The lawsuit raises regulatory questions, 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. Other allegations in the complaint include threats made by World Liberty co-founder Chase Herro against Sun and his businesses. Herro allegedly threatened to burn Sun's $WLFI tokens if Sun did not request that they be burned and falsely claimed that the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to U.S. authorities.
Portions of the lawsuit were redacted, with an attached filing citing a confidentiality provision and giving the World Liberty team the opportunity to decide whether these provisions should remain sealed. In a 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 World Liberty's new governance proposal published on April 15. 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.