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, alleges 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 connection to the Trump family and its claims of promoting decentralized finance. However, when Sun refused to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company's principals allegedly became hostile towards him. The lawsuit claims that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens.
These misrepresentations allegedly include statements about token holder rights, governance rights, and the freedom to transact. Sun's suit also alleges that World Liberty, despite presenting itself as a decentralized finance business, has centralized control over its tokens.
The company is accused of changing the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this to investors. The complaint argues that this modification was not put to a governance vote and was not visible to token holders, even as they had just approved a proposal to make a portion of the supply tradable.
The lawsuit further alleges that World Liberty's freezing of Sun's tokens served to pressure him into minting $200 million of the company's USD1 stablecoin on his Tron blockchain and to manipulate the market price of $WLFI tokens 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 the company's founders and treasury. The lawsuit raises regulatory questions, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
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 tried to resolve the situation in good faith and seeks to be treated the same as other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15.