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, which was filed on Tuesday, claims that World Liberty's leadership participated in an 'illegal scheme to seize property' in the form of Sun's tokens, which he had purchased after being approached by the company in 2024.
Sun invested $45 million in $WLFI tokens, reportedly due to the project's claimed focus on promoting decentralized finance, a cause he is deeply invested in, as well as the involvement of the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit. According to the filing, World Liberty asked Sun to continue investing in 2025, including a request to mint the company's USD1 stablecoin. However, when it became clear that Sun would not invest on their terms by July 2025, the company's principals allegedly became hostile towards him.
The lawsuit alleges that World Liberty induced Sun to invest through 'fraudulent misrepresentations and omissions' regarding the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations reportedly included statements about token holder rights, public statements by World Liberty or its executives about governance rights, and claims about the 'freedom to transact.' The suit also claims that World Liberty, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens. The complaint states that World Liberty modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without disclosure to investors or a governance vote. This modification allegedly enabled World Liberty to freeze Sun's tokens, serving a dual purpose: pressuring him to mint $200 million of the company's USD1 stablecoin on the Tron blockchain and manipulating the market price of $WLFI tokens by preventing one of the largest holders from selling.
The complaint argues that World Liberty's actions artificially supported the market price of $WLFI tokens held by the company's founders and treasury. Furthermore, 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 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 Sun's know-your-customer documentation was inadequate, threatening to report him to US authorities.
Portions of the lawsuit were redacted, with an attached filing citing a confidentiality provision and offering the World Liberty team the opportunity to decide whether these provisions should remain sealed. In a social media post, Sun stated that he had attempted to resolve the situation in good faith and sought equal treatment as other early investors who received tokens. He also expressed opposition to World Liberty's new governance proposal published 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 dinner last year. Sun recently settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case from the previous presidential administration.