Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump, alleging that the company froze his $WLFI token holdings without justification, made false representations, and intimidated him. The lawsuit, filed on Tuesday, asserts that World Liberty's leadership engaged in an illicit scheme to confiscate 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 close to his heart, 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 apparent 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 lured investors, including Sun, into purchasing $WLFI tokens through deceitful representations and omissions regarding the economic rights and freedoms associated with token ownership. These purportedly fraudulent representations include statements about token holders' rights, public declarations by World Liberty or its executives about governance rights, and assertions about the 'freedom to transact.' Sun's lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, exercises centralized control over its tokens.
According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to introduce a 'blacklisting' function, enabling the company to freeze tokens in specific wallets. This modification was not put to a governance vote or disclosed to investors, Sun claims, even as token holders had just approved a proposal to make a portion of the supply tradable. The complaint alleges that World Liberty's freezing of Sun's tokens served a dual purpose: coercing him into minting $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 inflated the market price of $WLFI tokens held by World Liberty founders and the company's corporate treasury.
World Liberty's ability to issue, freeze, and reassign tokens may not only undermine its decentralization claims but also raise regulatory concerns. The filing argues that these powers could qualify the firm as a money transmitter under US Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
Other allegations in the complaint include that World Liberty made two explicit threats to Sun and his businesses. Chase Herro, one of World Liberty's co-founders, allegedly threatened to destroy Sun's $WLFI tokens if Sun did not request that his tokens be burned. Herro also falsely claimed that the know-your-customer documentation submitted by Sun and his companies in connection with their $WLFI token purchases was inadequate, the filing said. Herro threatened to report Sun to US authorities, the suit alleged.
Portions of the lawsuit were redacted. Another filing attached to the lawsuit cited a confidentiality provision, stating that Sun's team was giving the World Liberty team an opportunity to decide whether the redacted provisions should remain sealed. In a post on social media, Sun stated that he had 'tried in good faith to resolve this situation.' 'All I want is to be treated the same as every other early investor who received tokens — no better, no worse,' he said. 'I also want the community to know that I strongly oppose the new governance proposal World Liberty published on April 15,' Sun said in his post.
Since Trump took office, Sun has visited the US after previously avoiding the country. He was a guest at Trump's first memecoin dinner, tied to a different Trump-linked crypto project, last year. Sun settled charges with the US Securities and Exchange Commission last month, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.