Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with connections to the family of former US President Donald Trump. The lawsuit claims that World Liberty unfairly froze Sun's $WLFI token holdings, made false representations, and issued threats against him.
According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being solicited by the World Liberty team in 2024, partly due to the project's association with the Trump family and its purported aim to promote 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 introduce 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 complaint argues that this modification was used to freeze Sun's tokens, serving the dual purpose of pressuring him to mint $200 million of the USD1 stablecoin on the Tron blockchain and artificially propping up the market price of $WLFI tokens held by World Liberty founders and its corporate treasury. The lawsuit raises regulatory questions, 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 co-founder Chase Herro to burn Sun's $WLFI tokens and to report Sun to US authorities over allegedly inadequate know-your-customer documentation. Sun has stated that he tried to resolve the situation in good faith and seeks equal treatment as other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15.