Justin Sun, the founder of Tron, has taken legal action against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company froze his $WLFI tokens and made false representations. According to the lawsuit, Sun invested $45 million in $WLFI tokens after being approached by World Liberty's team in 2024, but the company later became hostile when he refused to invest further. The lawsuit claims that World Liberty made fraudulent misrepresentations about the rights of token holders and that the company has centralized control over its tokens, despite presenting itself as a decentralized finance project.
Sun's suit also alleges that World Liberty changed the smart contract governing $WLFI tokens to add a 'blacklisting' function, which allowed the company to freeze tokens in specific wallets without disclosing this to investors. The complaint argues that World Liberty's actions were intended to pressure Sun into minting $200 million of the company's USD1 stablecoin and to manipulate the market price of $WLFI tokens. The lawsuit raises regulatory questions, as World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under US law, subjecting it to registration and anti-money laundering requirements.