Tron founder Justin Sun has taken legal action against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false representations, and engaged in threatening behavior. The lawsuit, which was filed on Tuesday, claims that World Liberty's leadership participated in an 'illegal scheme to seize property' in the form of Sun's tokens, which he purchased after being approached by the company in 2024. According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's potential to promote decentralized finance, a cause he is deeply passionate about, as well as its connection to the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The filing states that World Liberty requested Sun to continue investing in the project through 2025, including a proposal to mint the company's USD1 stablecoin. However, when it became clear that Sun would not invest on their terms, the company's principals allegedly became hostile towards him. The lawsuit alleges that World Liberty made false representations about the economic rights and freedoms associated with purchasing $WLFI tokens, including statements about token holder rights, governance, and the ability to transact freely. Sun's lawsuit also claims that World Liberty, despite presenting itself as a decentralized finance company, has centralized control over its tokens.
The complaint alleges that World Liberty modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors. The lawsuit argues that this modification enabled World Liberty to freeze Sun's tokens, which served a dual purpose: 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 preventing one of the largest holders from selling. By locking up Sun's position, the complaint claims that World Liberty artificially inflated the market price of $WLFI tokens held by the company'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 under U.S.
Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements. The complaint also alleges that World Liberty made threats against Sun and his businesses, including a claim by co-founder Chase Herro that he would burn Sun's $WLFI tokens if Sun did not request that they be burned.
Herro also allegedly threatened to report Sun to U.S. authorities, claiming that the know-your-customer documentation submitted by Sun was inadequate. Portions of the lawsuit have been 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 attempted to resolve the situation in good faith and sought to be treated equally to other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15. Sun has recently settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.