Justin Sun, the founder of Tron, 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, filed on Tuesday, claims that World Liberty unfairly locked up Sun's $WLFI token holdings, made false representations, and threatened and defamed 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. The lawsuit alleges that World Liberty's leadership engaged in an 'illegal scheme to seize property' in the form of Sun's tokens.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. The filing states 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, World Liberty's principals 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 'freedom to transact.' Sun's suit also alleges that World Liberty, despite presenting itself as a decentralized finance business, had 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 argues that this modification was not put to a governance vote and was buried in the code without alerting token holders.
The complaint alleges 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 propped up the market price of $WLFI tokens held by World Liberty founders and the company's corporate treasury.' The lawsuit raises regulatory questions, arguing that World Liberty's ability to issue, freeze, and reassign tokens may qualify the firm as a money transmitter under U.S. Financial Crimes Enforcement Network rules. Other allegations in the complaint include that World Liberty made overt threats to Sun and his businesses, including a threat to burn Sun's $WLFI tokens if he did not ask for them to be burned.
The lawsuit also alleges that World Liberty's co-founder, Chase Herro, falsely claimed that the know-your-customer documentation submitted by Sun was inadequate and threatened to report him to U.S. authorities. Chunks of the lawsuit were redacted, with a filing attached to the lawsuit citing a confidentiality provision.
In a post, Sun stated that he had 'tried in good faith to resolve this situation' and wanted to be treated the same as every other early investor 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 staying away from the country, including attending a memecoin dinner tied to a different Trump-linked crypto project.
Last month, 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.