Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false representations, and issued threats against him. The lawsuit, filed recently, asserts that World Liberty's actions were part of an 'illegal scheme to seize property' and that the company's leadership engaged in fraudulent behavior to deceive investors.
According to the lawsuit, Sun invested $45 million in $WLFI tokens in 2024 after being solicited by World Liberty's team, who highlighted the project's potential to promote decentralized finance. However, when Sun declined to continue investing in 2025, World Liberty's attitude towards him allegedly became hostile.
The lawsuit claims that World Liberty made false statements about the rights of token holders and the governance of the $WLFI token, including the 'freedom to transact.' Furthermore, the lawsuit alleges that World Liberty modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing the company to freeze tokens without warning or disclosure to investors. This modification was not put to a governance vote, and token holders were not informed of its existence or implications. The complaint argues that World Liberty's actions served a dual purpose: to pressure Sun into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens by preventing one of the largest holders from selling.
By locking up Sun's position, World Liberty allegedly 'artificially propped up the market price of $WLFI tokens' held by the company's founders and corporate treasury. The lawsuit also raises concerns about World Liberty's ability to issue, freeze, and reassign tokens, which may qualify the firm as a money transmitter under US regulations, subjecting it to registration and anti-money laundering requirements. Other allegations include threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses.
Herro allegedly threatened to burn Sun's $WLFI tokens and to report him to US authorities for allegedly inadequate know-your-customer documentation. Sun has stated that he tried to resolve the situation amicably but was met with hostility.
He also expressed opposition to World Liberty's new governance proposal, published on April 15. The lawsuit has sparked a significant controversy, with many in the cryptocurrency community watching the developments closely.