Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former U.S. President Donald Trump, alleging that his $WLFI token holdings were unfairly frozen and that the company made fraudulent representations and threats against him. The lawsuit claims that World Liberty's actions were part of an 'illegal scheme to seize property' and that the company's leadership became hostile towards Sun when he declined to invest further in 2025. World Liberty is accused of inducing investments through false statements about the rights and freedoms associated with purchasing $WLFI tokens, including claims about governance rights and the freedom to transact.
The lawsuit also alleges that World Liberty has centralized control over its tokens, despite presenting itself as a decentralized finance business. According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing the company to freeze tokens without disclosing this change to investors. This modification allegedly enabled World Liberty to freeze Sun's tokens, which served to pressure him into minting $200 million of the company's USD1 stablecoin and to manipulate the market price of $WLFI tokens. The lawsuit raises regulatory questions, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter, subject to registration and anti-money laundering requirements.
Other allegations include threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses, as well as false claims about the adequacy of know-your-customer documentation submitted by Sun. 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 be treated equally to other early investors and to resolve the situation amicably.