Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency and stablecoin firm with ties to the family of former US President Donald Trump. The lawsuit claims that World Liberty improperly froze Sun's $WLFI token holdings, made false representations, and engaged in threatening and defamatory behavior towards him.
According to the lawsuit, Sun invested $45 million in $WLFI tokens in 2024 after being solicited by the World Liberty team, partly due to the project's association with the Trump family and its claims of promoting decentralized finance. 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 economic rights and liberties associated with purchasing $WLFI tokens, including statements about token holder rights and governance. 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 change to investors or putting it to a governance vote.
The lawsuit argues that this modification was used to freeze Sun's tokens, pressuring him to mint $200 million of the USD1 stablecoin on the Tron blockchain and artificially propping up the market price of $WLFI tokens held by World Liberty founders and its corporate treasury. The complaint 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. Additionally, the lawsuit alleges that World Liberty made overt threats to Sun and his businesses, including a threat to burn his $WLFI tokens and a claim that his know-your-customer documentation was inadequate, with a warning to report him to US authorities. Sun has stated that he tried to resolve the situation in good faith and seeks to be treated equally to other early investors who received tokens.