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 froze his $WLFI token holdings without justification, made false representations, and engaged in threatening behavior. The lawsuit, filed on Tuesday, asserts that World Liberty's actions constitute an 'illegal scheme to seize property' in the form of Sun's tokens, which he claims to have purchased after being approached by the company's team 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 his heart, as well as the Trump family's involvement with the project. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The filing 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 clear that Sun would not invest or mint USD1 on their terms, the company's principals allegedly became hostile towards him.
The lawsuit claims that World Liberty induced Sun to make his investments through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These alleged misrepresentations include statements regarding the rights of token holders, public statements made by World Liberty or its executives about governance rights, and claims about the 'freedom to transact.' Sun's lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, exercised centralized control over its tokens.
The complaint states that World Liberty modified the smart contract governing $WLFI in August 2025 to introduce a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors or putting it to a governance vote. The lawsuit argues that this modification served a dual purpose: pressuring Sun to mint $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating the market price of $WLFI tokens by preventing one of the largest holders from selling. By freezing Sun's tokens, the complaint claims that World Liberty artificially inflated 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 it 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's co-founder, Chase Herro, against Sun and his businesses. Herro allegedly threatened to burn Sun's $WLFI tokens if he did not request that they be burned and falsely claimed that the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to US authorities. Portions of the lawsuit have been redacted, with an attached 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 and sought to be treated equally to other early investors who received tokens.
He also expressed 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 and was a guest at a Trump-linked crypto project's dinner last year. Recently, Sun 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.