Tron's founder, Justin Sun, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, accusing the company of wrongfully freezing his $WLFI token holdings and engaging in deceptive practices. The lawsuit claims that World Liberty's actions, including the freezing of Sun's assets and alleged threats, constitute an illegal scheme to seize property. According to the filing, Sun invested $45 million in $WLFI tokens in 2024 after being approached by World Liberty's team, partly due to the project's connection to the Trump family and its purported goal 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 turned hostile. The lawsuit alleges that World Liberty made false representations about the rights and freedoms associated with purchasing $WLFI tokens, including statements about governance rights and the ability to transact freely. It is also claimed that despite presenting itself as a decentralized finance project, World Liberty exercises centralized control over its tokens.
The company is accused of modifying the smart contract governing $WLFI in August 2025 to include a 'blacklisting' function, which allowed it to freeze tokens in specific wallets without disclosing this change to investors. This alteration was allegedly used 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 inflating the market price of $WLFI tokens held by World Liberty's founders and treasury.
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. Additional allegations include threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses, including a threat to burn Sun's $WLFI tokens and to 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 to be treated equally to other early investors. He also voiced his opposition to a new governance proposal published by World Liberty. This development follows Sun's recent settlement with the U.S.
Securities and Exchange Commission, in which he agreed to pay a $10 million fine.