Justin Sun, the founder of Tron, has filed a lawsuit against World Liberty Financial, a cryptocurrency firm backed by members of the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false representations, and threatened him. According to the lawsuit, Sun invested $45 million in $WLFI tokens after being solicited by World Liberty's team in 2024, partly due to the project's association with the Trump family. However, when Sun refused to invest further or mint World Liberty's USD1 stablecoin, the company's principals allegedly became hostile towards him.
The lawsuit claims that World Liberty made fraudulent misrepresentations about the rights and liberties associated with purchasing $WLFI tokens and that the company has centralized control over its tokens, despite presenting itself as a decentralized finance project. The complaint also alleges that World Liberty changed the smart contract governing $WLFI to add a 'blacklisting' function, which allowed the company to freeze tokens without disclosing this to investors. By freezing Sun's tokens, World Liberty allegedly aimed to pressure him into minting $200 million of the company's USD1 stablecoin and manipulate the market price of $WLFI tokens. The lawsuit raises regulatory concerns, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter, subjecting it 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 and report him to U.S. authorities.
Sun has stated that he tried to resolve the situation amicably and seeks to be treated equally to other early investors who received tokens.