Tron's founder, Justin Sun, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false representations, and issued threats against him. The lawsuit, filed recently, claims that World Liberty's leadership engaged in an 'illegal scheme to seize property' by locking up Sun's tokens, which he had purchased after being solicited by the company in 2024.
Sun invested $45 million in $WLFI tokens, partly due to the project's claimed support for decentralized finance and its association with the Trump family. However, when Sun refused to continue investing in 2025, including a request to mint the USD1 stablecoin, World Liberty's attitude towards him became hostile. The lawsuit alleges that World Liberty made fraudulent misrepresentations about the rights and liberties associated with purchasing $WLFI tokens, including statements about governance rights and the freedom to transact. It also claims that the company centralized control over its tokens, contrary to its decentralized finance claims.
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 disclosure to investors. This modification was not put to a governance vote, and token holders had just approved a proposal to make a portion of the supply tradable.
The complaint argues that World Liberty's actions served a dual purpose: pressuring Sun to mint $200 million of the USD1 stablecoin on his Tron blockchain and manipulating the market price of $WLFI tokens by preventing one of the largest holders from selling. By locking up Sun's position, World Liberty 'artificially propped up the market price of $WLFI tokens held by World Liberty founders and the company's corporate 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.
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 for allegedly inadequate know-your-customer documentation. Sun has stated that he tried to resolve the situation in good faith and seeks equal treatment as other early investors who received tokens.