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 claims that World Liberty unfairly froze Sun's $WLFI token holdings, made false representations, and threatened and defamed 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 association with the Trump family. 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 alleges that World Liberty made fraudulent misrepresentations about the rights and liberties associated with purchasing $WLFI tokens, including statements about governance rights and the freedom to transact. It is also claimed that World Liberty exercised centralized control over its tokens, contrary to its decentralized finance claims. In August 2025, World Liberty modified the smart contract governing $WLFI to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this to investors.
The complaint argues that this change was used to freeze Sun's tokens, pressuring him to mint $200 million of the company's USD1 stablecoin and artificially propping up the market price of $WLFI tokens held by World Liberty founders. 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 co-founder Chase Herro to burn Sun's $WLFI tokens and report him to U.S. authorities over allegedly inadequate know-your-customer documentation.
Sun has stated that he tried to resolve the situation amicably and seeks equal treatment as other early investors who received tokens.