Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former U.S. President Donald Trump.
The lawsuit, filed on Tuesday, claims that World Liberty unfairly locked up Sun's $WLFI token holdings, engaged in fraudulent activities, and made threats against him. According to the lawsuit, World Liberty's leadership participated in an 'illegal scheme to seize property' by freezing Sun's tokens, which he had purchased after being approached by the company in 2024. The lawsuit states that Sun invested $45 million in $WLFI tokens due to the project's claims of promoting decentralized finance, a cause he deeply cares about, as well as the Trump family's involvement with the project. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The lawsuit alleges that 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 or mint USD1 on their terms, World Liberty's principals became hostile towards him.
The lawsuit claims that World Liberty induced Sun to invest through 'fraudulent misrepresentations and omissions' about the economic rights and liberties associated with purchasing $WLFI tokens. These alleged misrepresentations include statements about token holders' rights, public statements by World Liberty or its executives about governance rights, and statements about the 'freedom to transact.' The lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance business, had centralized control over its tokens. According to the complaint, 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.
This modification was not disclosed to investors or put to a governance vote, the lawsuit claims. The complaint alleges that World Liberty's freezing of Sun's tokens served two purposes: pressuring him to mint $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating $WLFI's market price by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, 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, as World Liberty's ability to issue, freeze, and reassign tokens may qualify the firm as a money transmitter under U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
The complaint also alleges that World Liberty made threats against Sun and his businesses, including a threat to burn Sun's $WLFI tokens if he did not request that they be burned. Another threat involved falsely claiming that the know-your-customer documentation submitted by Sun and his companies was inadequate, with a warning that Sun would be reported to U.S. authorities.
Portions of the lawsuit were redacted, with an attached filing citing a confidentiality provision and offering the World Liberty team an opportunity to decide whether the redacted provisions should remain sealed. In a post on social media, Sun stated that he had 'tried in good faith to resolve this situation' and wanted to be treated the same as other early investors who received tokens. Sun also expressed his opposition to a new governance proposal published by World Liberty on April 15.
Since Trump took office, Sun has visited the U.S. after previously avoiding the country.
He was a guest at Trump's first memecoin dinner, related to a different Trump-linked crypto project, last year. Recently, Sun settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.