Justin Sun, the founder of Tron, has filed 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 and made false representations about the tokens. The lawsuit claims that World Liberty's actions were part of an 'illegal scheme to seize property' and that the company's leadership engaged in fraudulent behavior. According to the suit, Sun invested $45 million in $WLFI tokens after being solicited by World Liberty's team in 2024, but the company later became hostile towards him when he refused to continue investing.
The lawsuit alleges that World Liberty made false statements about the rights of token holders and the governance of the $WLFI tokens, and that the company had centralized control over the tokens despite presenting itself as a decentralized finance project. The suit also claims that World Liberty changed the smart contract governing the $WLFI tokens without disclosing the changes to investors, and that the company used this new functionality to freeze Sun's tokens. The complaint argues that this freeze served to pressure Sun into minting $200 million of World Liberty's USD1 stablecoin and to manipulate the market price of the $WLFI tokens. The lawsuit also raises regulatory concerns, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify the company as a money transmitter under US law.
Additionally, the suit alleges that World Liberty's co-founder, Chase Herro, made threatening statements towards Sun, including a threat to burn Sun's $WLFI tokens if he did not request that they be burned. Sun has stated that he tried to resolve the situation amicably but was forced to take legal action to protect his rights as an investor.