Justin Sun, the founder of the Tron blockchain, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm linked to the family of former US President Donald Trump. The lawsuit, filed on Tuesday, asserts that World Liberty Financial unfairly froze Sun's $WLFI token holdings and made fraudulent claims, in addition to threatening and defaming him.
According to the lawsuit, World Liberty's leadership engaged in an 'illegal scheme to seize property', specifically Sun's tokens, which he purchased after being solicited by the company in 2024. Sun invested $45 million in $WLFI tokens, partly due to the project's association with the Trump family and its claims to promote decentralized finance, a cause Sun deeply cares about.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. The filing states that World Liberty requested Sun to continue investing in 2025, including minting the company's USD1 stablecoin.
However, when it became clear that Sun would not comply with their terms by July 2025, World Liberty's principals allegedly became hostile towards him. The lawsuit claims that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations allegedly include statements about token holder rights, governance rights, and the 'freedom to transact'.
Sun's suit also alleges that World Liberty, despite presenting itself as a decentralized finance business, has 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. This modification was not put to a governance vote, despite token holders having just approved a proposal to make a portion of the supply tradable.
The lawsuit argues that World Liberty's freezing of Sun's tokens served to pressure him into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens by preventing one of the largest holders from selling. By locking up Sun's position, the complaint claims that World Liberty artificially inflated the market price of $WLFI tokens held by the company's founders and 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 US 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's co-founder, Chase Herro, against Sun and his businesses.
Herro allegedly threatened to burn Sun's $WLFI tokens if Sun did not request their destruction and falsely claimed that Sun's know-your-customer documentation was inadequate, threatening to report him to US authorities. Portions of the lawsuit were redacted, with Sun's team giving World Liberty 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 to be treated equally to other early investors. He also expressed opposition to World Liberty's new governance proposal published on April 15. Since Trump took office, Sun has visited the US and was a guest at a Trump-linked crypto project dinner. Recently, Sun settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine.