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, claims that World Liberty Financial unjustly froze Sun's $WLFI token holdings, made false representations, and threatened and defamed him.
According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being approached by the World Liberty team in 2024, partly due to the project's connection to the Trump family and its claims 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 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 the freedom to transact. It is also claimed that World Liberty, despite presenting itself as a decentralized finance business, exerted centralized control over its tokens.
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 disclosing this change to investors or putting it to a governance vote. The lawsuit argues that this modification enabled World Liberty to freeze Sun's tokens, serving the dual purpose of 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 locking up Sun's position, World Liberty is accused of artificially propping up the market price of $WLFI tokens held by its founders and corporate treasury. The company's ability to issue, freeze, and reassign tokens may raise regulatory questions, potentially qualifying it as a money transmitter under US Financial Crimes Enforcement Network rules.
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 US authorities due to 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.