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 claims, and threatened him. The lawsuit, which was filed on Tuesday, claims that World Liberty's leadership engaged in an 'illegal scheme to seize property' by locking up Sun's tokens, which he had purchased after being solicited by the company in 2024. Sun invested $45 million in $WLFI tokens, reportedly due to the project's association with the Trump family and its claims of promoting decentralized finance.
However, when Sun refused to continue investing in 2025, World Liberty's principals allegedly became hostile towards him. The lawsuit alleges that World Liberty made fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens, including statements about token holder governance rights and the 'freedom to transact'. It is also claimed that World Liberty has centralized control over its tokens, despite presenting itself as a decentralized finance business. The company allegedly modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this to investors.
The complaint argues that this modification was used to pressure Sun into minting $200 million of World Liberty's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens. By freezing Sun's tokens, World Liberty is accused of artificially propping up the market price of $WLFI tokens held by the company's founders and treasury.
The lawsuit also raises regulatory concerns, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under US Financial Crimes Enforcement Network rules. Other allegations include threats made by World Liberty co-founder Chase Herro to burn Sun's $WLFI tokens and to report him to US authorities over allegedly inadequate know-your-customer documentation. Sun has stated that he tried to resolve the situation amicably and wants to be treated the same as other early investors who received tokens.