Justin Sun, the founder of Tron, 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 unfairly locked up Sun's $WLFI holdings, made false representations, and issued threats against 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 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 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 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 company is accused of modifying the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this change to investors. This modification was not put to a governance vote, Sun alleges. The complaint argues that World Liberty's actions served a dual purpose: pressuring Sun to mint $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating $WLFI's market price by preventing one of the largest holders from selling.
By locking up Sun's position, the lawsuit claims that World Liberty artificially propped up the market price of $WLFI tokens held by the company's founders and its 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 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. Significant portions of the lawsuit have been redacted, with Sun's team offering the World Liberty team the opportunity to decide whether these provisions should remain sealed. In a public statement, Sun expressed his desire to be treated equally to other early investors and voiced his opposition to a new governance proposal published by World Liberty. This lawsuit comes after Sun settled charges with the U.S.
Securities and Exchange Commission last month, agreeing to pay a $10 million fine.