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 recently, claims that World Liberty Financial unfairly froze Sun's holdings of $WLFI tokens, engaged in fraudulent activities, and made threats against him. According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being approached by the World Liberty team in 2024, partly due to the project's connection to the Trump family and its purported aim to promote decentralized finance.
However, when Sun declined to continue investing in 2025, including a request to mint the USD1 stablecoin, the relationship 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 maintained centralized control over its tokens.
In August 2025, World Liberty modified the smart contract governing $WLFI to introduce 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. The lawsuit argues that this modification was 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. This ability to issue, freeze, and reassign tokens may not only contradict World Liberty's claims of decentralization but also raise regulatory concerns, potentially qualifying the firm as a money transmitter subject to registration and anti-money laundering requirements. The complaint also includes allegations of 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 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 comes after Sun's recent settlement with the U.S. Securities and Exchange Commission, where he agreed to pay a $10 million fine.