Justin Sun, the founder of the Tron blockchain, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former U.S. President Donald Trump. The lawsuit, filed on Tuesday, alleges that World Liberty Financial unfairly froze Sun's $WLFI token holdings and made fraudulent representations to him.
According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being solicited by the World Liberty team in 2024, partly due to the project's claims of promoting decentralized finance and its association with the Trump family. However, when Sun declined to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company'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 included statements about token holder rights, governance rights, and the freedom to transact. The lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, had centralized control over its tokens. In August 2025, World Liberty modified the smart contract governing $WLFI to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors.
The complaint argues that this modification was used to freeze Sun's tokens, serving the dual purpose of pressuring him to mint $200 million of the company's USD1 stablecoin on the Tron blockchain and manipulating the market price of $WLFI tokens. By locking up Sun's position, World Liberty allegedly artificially propped up the market price of $WLFI tokens held by its founders and 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's co-founder, Chase Herro, to burn Sun's $WLFI tokens and to report him to U.S. authorities over allegedly inadequate know-your-customer documentation. Chunks 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 tried to resolve the situation in good faith and sought to be treated the same as other early investors.
He also expressed opposition to a new governance proposal published by World Liberty on April 15.