Tron founder Justin Sun has taken legal action 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, filed recently, asserts that World Liberty's actions constitute an 'illegal scheme to seize property' and that the company's leadership engaged in fraudulent behavior to induce investments. According to the filing, Sun invested $45 million in $WLFI tokens after being solicited by World Liberty in 2024, partly due to the project's association with the Trump family and its claims of promoting decentralized finance. However, when Sun declined to continue investing in 2025, including a request to mint the USD1 stablecoin, World Liberty's attitude towards him allegedly became hostile.
The lawsuit claims that World Liberty misled investors about the rights and freedoms associated with purchasing $WLFI tokens, including statements about governance rights and the ability to transact freely. It is also alleged that the company exerted centralized control over its tokens, contrary to its decentralized finance claims. In August 2025, World Liberty modified the smart contract governing $WLFI to include 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.
This modification allegedly enabled World Liberty to freeze Sun's tokens, serving the dual purpose of pressuring him to mint $200 million of the USD1 stablecoin on the Tron blockchain and artificially propping up the market price of $WLFI tokens held by the company's founders and treasury. The complaint further argues that World Liberty's ability to issue, freeze, and reassign tokens may subject it to registration and anti-money laundering requirements as a money transmitter under U.S. regulations.
Additionally, the lawsuit includes allegations of threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses, including a claim that Herro threatened to burn Sun's $WLFI tokens and report him to U.S. authorities over allegedly inadequate know-your-customer documentation. Portions of the lawsuit have been redacted, with Sun's team offering World Liberty the opportunity to decide whether these provisions should remain sealed. In a public statement, Sun expressed his desire to resolve the situation amicably and be treated equally to other early investors, while also opposing a new governance proposal published by World Liberty.
This development comes after Sun settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine, and follows his increased engagement with the U.S.
after previously avoiding the country.