Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump. The lawsuit, filed on Tuesday, alleges that World Liberty Financial unfairly locked up Sun's $WLFI holdings and made fraudulent representations. It also claims that the company's leadership engaged in an illegal scheme to seize Sun's tokens, which he had purchased after being solicited by World Liberty in 2024. Sun invested $45 million in $WLFI tokens, partly due to the project's association with the Trump family and its purported goal of promoting decentralized finance.
However, when Sun declined to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company's principals allegedly became hostile towards him. The lawsuit accuses World Liberty of inducing Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations allegedly include statements about token holder rights, governance rights, and the freedom to transact. Sun's suit also claims that World Liberty, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens.
The company modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this change to investors or putting it to a governance vote. The complaint alleges that World Liberty's actions served a dual purpose: to pressure Sun into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens by preventing one of the largest holders from selling. By locking up Sun's position, World Liberty allegedly 'artificially propped up the market price of $WLFI tokens' held by the company's founders and 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 US 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 to report him to US authorities over allegedly inadequate know-your-customer documentation.
Portions of the lawsuit have been redacted, with Sun's team giving World Liberty the opportunity to decide whether these provisions should remain sealed. In a post, Sun stated that he had tried to resolve the situation in good faith and sought equal treatment as other early investors. He also expressed opposition to World Liberty's new governance proposal published on April 15.
This lawsuit comes after Sun settled charges with the US Securities and Exchange Commission last month, agreeing to pay a $10 million fine.