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 illicit scheme to seize Sun's tokens, which he had purchased after being approached by the company's team in 2024.
According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's potential to promote decentralized finance, a cause he deeply cares about, as well as the involvement of the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The company had asked Sun to continue investing in 2025, including a request to mint the USD1 stablecoin. However, when it became clear that Sun would not invest on their terms, World Liberty's principals became hostile towards him. The lawsuit alleges that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations included statements about token holder rights, public statements by World Liberty or its executives, and claims about the freedom to transact.
The lawsuit also claims that World Liberty, despite presenting itself as a decentralized finance business, exerted 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 without disclosing this change to investors. The modification was not put to a governance vote, and token holders had just approved a proposal to make a portion of the supply tradable.
The complaint alleges that World Liberty's freezing of Sun's tokens served a dual purpose: 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 US 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 if he did not request that they be burned.
Herro also allegedly claimed that the know-your-customer documentation submitted by Sun and his companies was inadequate and threatened to report Sun to US authorities. Portions of the lawsuit were redacted, with another filing citing a confidentiality provision and giving the World Liberty team 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 wanted to be treated the same 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 Trump's first memecoin 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 brought by the previous presidential administration.