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 locked up his $WLFI token holdings without justification, made false representations, and threatened him. The lawsuit, which was filed on Tuesday, claims that World Liberty's leadership engaged in an 'illegal scheme to seize property' by freezing Sun's tokens, which he had purchased in 2024 after being solicited by the company. Sun invested $45 million in $WLFI tokens, reportedly due to the project's claimed support for decentralized finance and its association with 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 Sun refused to invest on their terms, 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 'freedom to transact.' Sun's suit also claims that World Liberty, despite presenting itself as a decentralized finance company, has 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 disclosing this to investors.
This modification was allegedly made without a governance vote or notification to token holders. The lawsuit argues that World Liberty's freezing of Sun's tokens served to pressure him into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens.
By locking up Sun's position, World Liberty allegedly 'artificially propped up the market price of $WLFI tokens held by World Liberty founders and the company's corporate treasury.' The complaint raises regulatory concerns, 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, 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, to burn Sun's $WLFI tokens and to report him to U.S. authorities for 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 attempted to resolve the situation in good faith and sought to be treated equally to other early investors.
He also expressed opposition to World Liberty's new governance proposal published on April 15.