Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, claiming that the company froze his $WLFI token holdings without justification, made false representations, and defamed him. The lawsuit, which was filed on Tuesday, asserts that World Liberty's leadership engaged in an 'illegal scheme to seize property' by freezing Sun's tokens, which he had purchased after being solicited by the company in 2024.
According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's claims of promoting decentralized finance and its association with the Trump family. However, when it became clear that Sun would not invest further or mint the company's USD1 stablecoin, World Liberty's principals allegedly became hostile towards him.
The lawsuit claims that World Liberty made fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens, including statements about token holder rights and the freedom to transact. It is also alleged that World Liberty, despite presenting itself as a decentralized finance business, has 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 to investors. The lawsuit claims that this modification was used to freeze Sun's tokens, which served the dual purpose of pressuring him to mint $200 million of the company's USD1 stablecoin and manipulating the market price of $WLFI tokens. Furthermore, the complaint alleges that World Liberty's ability to issue, freeze, and reassign tokens may raise regulatory questions and potentially qualify the firm as a money transmitter under U.S.
Financial Crimes Enforcement Network rules. Other allegations include threats made by World Liberty's co-founder, Chase Herro, to burn Sun's $WLFI tokens and report him to U.S.
authorities. The lawsuit also mentions that chunks of the filing were redacted, with Sun's team giving World Liberty the opportunity to decide whether these provisions should remain sealed.
In a post, Sun stated that he had attempted to resolve the situation in good faith and sought to be treated equally to other early investors who received tokens.