Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump. The lawsuit, filed on Tuesday, claims that World Liberty unfairly froze Sun's $WLFI token holdings, engaged in fraudulent activities, and made threats against him.
According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being approached by World Liberty's team in 2024, partly due to the project's connection to the Trump family and its promise to promote decentralized finance. However, when Sun declined to invest further 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 false representations about the rights and freedoms associated with purchasing $WLFI tokens, including statements about governance rights and the ability to transact freely.
It is also claimed that World Liberty exercised centralized control over its tokens, contrary to its decentralized finance claims. In August 2025, the company allegedly 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. The complaint argues that this modification was used to freeze Sun's tokens, both to pressure him into minting $200 million of the USD1 stablecoin on the Tron blockchain and to artificially inflate the market price of $WLFI tokens held by World Liberty's founders and treasury. The lawsuit raises concerns about World Liberty's regulatory status, suggesting that its ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under US 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 to report him to US authorities over allegedly inadequate know-your-customer documentation. Sun has stated that he attempted to resolve the situation amicably and seeks 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. This development comes after Sun recently settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine.