Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a stablecoin and cryptocurrency firm with ties to the Trump family, alleging that the company engaged in fraudulent activities and unfairly froze his $WLFI token holdings. The lawsuit claims that World Liberty's leadership participated in an illegal scheme to seize Sun's tokens, which he had purchased after being solicited by the company in 2024. Sun invested $45 million in $WLFI tokens, reportedly due to the project's claims of promoting decentralized finance and its association with the Trump family.
However, when Sun declined to continue investing in 2025, World Liberty's principals allegedly became hostile towards him. The lawsuit alleges that World Liberty made fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens, including statements about token holder rights and governance. It is also claimed that the company centralized control over its tokens, despite presenting itself as a decentralized finance business.
In August 2025, World Liberty modified the smart contract governing $WLFI to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosing this change to investors. The complaint argues that this modification enabled World Liberty to freeze Sun's tokens, serving a dual purpose: pressuring him to mint $200 million of the company's USD1 stablecoin and manipulating the market price of $WLFI tokens. 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, 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 report him to U.S.
authorities. Sun has stated that he attempted to resolve the situation in good faith and seeks equal treatment as other early investors who received tokens.