Tron's founder, Justin Sun, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company locked up his $WLFI holdings without justification, made false representations, and issued threats against him. The lawsuit claims that World Liberty's actions constitute an 'illegal scheme to seize property' in the form of Sun's tokens, which he purchased after being approached by the company's team in 2024. Sun invested $45 million in $WLFI tokens, partly due to the project's association with the Trump family and its purported goal of promoting decentralized finance, a cause Sun supports.
However, when Sun declined to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company's attitude towards him became hostile. The lawsuit alleges that World Liberty made fraudulent misrepresentations about the rights of token holders, including statements about governance and the freedom to transact. It is also claimed that the company has centralized control over its tokens, contrary to its decentralized finance claims. In August 2025, World Liberty modified the smart contract governing $WLFI to introduce a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors.
This modification was used to freeze Sun's tokens, allegedly to pressure him into minting $200 million of the USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens. By doing so, World Liberty artificially supported the market price of $WLFI tokens held by its founders and corporate treasury. The lawsuit raises concerns about World Liberty's decentralization claims and potential regulatory issues, as its ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under U.S.
regulations. Other allegations include threats made by World Liberty's 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. Sun has stated that he attempted to resolve the situation amicably and seeks equal treatment as other early investors.
He also expressed opposition to World Liberty's new governance proposal. Recently, Sun settled charges with the U.S.
Securities and Exchange Commission, agreeing to pay a $10 million fine.