Justin Sun, the creator of the Tron blockchain, 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, which was filed on Tuesday, alleges that World Liberty Financial unfairly froze Sun's $WLFI token holdings, made fraudulent representations, and issued threats against him. According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being solicited by the World Liberty team in 2024, 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 claims that World Liberty Financial induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations allegedly included statements about token holders' rights, governance rights, and the freedom to transact. The suit also alleges that World Liberty Financial, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens. In August 2025, the company modified the smart contract governing $WLFI to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this change to investors or putting it to a governance vote.
The complaint argues that this modification enabled World Liberty Financial to freeze Sun's tokens, serving 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 company allegedly artificially propped up the market price of $WLFI tokens held by its founders and corporate treasury. The lawsuit raises regulatory questions, suggesting that World Liberty Financial'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 co-founder Chase Herro to burn Sun's $WLFI tokens and to report him to U.S. authorities over allegedly inadequate know-your-customer documentation. Portions of the lawsuit have been redacted, with Sun's team giving World Liberty an opportunity to decide whether these provisions should remain sealed.
In a social media post, Sun stated that he had attempted to resolve the situation in good faith and sought equal treatment as other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15. The lawsuit comes after Sun settled charges with the U.S.
Securities and Exchange Commission last month, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.