Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm associated with the family of former U.S. President Donald Trump, alleging that the company unjustly froze his $WLFI token holdings, made deceitful representations, and defamed him.
The lawsuit, filed on Tuesday, asserts that World Liberty's leadership engaged in an 'illegal scheme to seize property' by locking up Sun's tokens, which he claims to have purchased after being approached by the company's team in 2024. According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's purported commitment to promoting decentralized finance, a cause he deeply cares about, as well as the Trump family's involvement with the project. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The lawsuit alleges that World Liberty asked Sun to continue investing in 2025, including a request to mint the company's USD1 stablecoin. However, when it became clear that Sun would not invest or mint USD1 on their terms by July 2025, World Liberty's principals allegedly became hostile towards him. The lawsuit claims that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens.
These alleged misrepresentations include statements about token holder rights, public statements by World Liberty or its executives about governance rights, and statements about the 'freedom to transact.' Sun's lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens. The complaint states 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 or putting it to a governance vote.
The lawsuit argues that World Liberty's freezing of Sun's tokens served a dual purpose: pressuring him 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 complaint argues, World Liberty artificially supported the market price of $WLFI tokens held by the company's founders and 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 in the complaint include threats made by World Liberty's co-founder, Chase Herro, to burn Sun's $WLFI tokens if he did not request that they be burned, as well as a claim that Herro falsely stated that the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to U.S. authorities. Portions of the lawsuit were redacted, with an attached filing citing a confidentiality provision and giving the World Liberty team an opportunity to decide whether these redacted provisions should remain sealed.
In a post, Sun stated that he had 'tried in good faith to resolve this situation' and expressed his desire to be treated the same as other early investors who received tokens. Sun also expressed his opposition to the new governance proposal published by World Liberty on April 15. Since Trump took office, Sun has visited the U.S. after previously avoiding the country and was a guest at Trump's first memecoin dinner last year.
Recently, Sun 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.