Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump, alleging that the company improperly locked his $WLFI holdings, engaged in fraudulent conduct, and issued threats against him. The lawsuit, which was filed on Tuesday, asserts that World Liberty's leadership participated in an 'illegal scheme to seize property' in the form of Sun's tokens, which he claims to have purchased after being solicited by the company in 2024.
According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's purported commitment to promoting decentralized finance, an issue close to Sun's heart, as well as the involvement of the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The lawsuit alleges that World Liberty requested Sun to continue investing in 2025, including a proposal to mint the company's USD1 stablecoin. However, when it became apparent that Sun would not invest on their terms by July 2025, the principals of World Liberty allegedly became hostile towards him.
The lawsuit claims that World Liberty induced Sun to invest through 'fraudulent misrepresentations and omissions' regarding the economic rights associated with purchasing $WLFI tokens. These alleged misrepresentations include statements about token holder rights, public statements by World Liberty or its executives about governance rights, and claims about the 'freedom to transact.' The lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens.
According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to introduce a 'blacklisting' function, enabling the company to freeze tokens in specific wallets. This modification was not put to a governance vote or disclosed to investors, according to Sun.
The complaint asserts that the freezing of Sun's tokens served a dual purpose: coercing him into minting $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating the market price of $WLFI by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, World Liberty artificially supported the market price of $WLFI tokens held by the company's founders and its corporate treasury.
The lawsuit raises regulatory concerns, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify the firm as a money transmitter under US Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements. Other allegations in the complaint include threats made by World Liberty against Sun and his businesses.
Chase Herro, a co-founder of World Liberty, allegedly threatened to burn Sun's $WLFI tokens if Sun did not request that his tokens be burned. Herro also falsely claimed that the know-your-customer documentation submitted by Sun was inadequate and threatened to report him to US authorities. Portions of the lawsuit were redacted, with another filing citing a confidentiality provision and offering the World Liberty team the opportunity to decide whether these redacted provisions should remain sealed. In a social media post, Sun stated that he had attempted to resolve the situation in good faith.
'All I want is to be treated the same as every other early investor who received tokens — no better, no worse,' he said. Sun also expressed his opposition to a new governance proposal published by World Liberty on April 15.
Since Trump took office, Sun has visited the US after previously avoiding the country. He was a guest at a memecoin dinner hosted by Trump last year.
Sun recently settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.