Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a crypto firm linked to the family of former U.S. President Donald Trump, alleging that the company wrongfully locked his $WLFI token holdings and engaged in fraudulent activities.
The lawsuit, which was filed on Tuesday, claims that World Liberty's leadership participated in an 'illegal scheme to seize property' in the form of Sun's tokens, which he had purchased after being solicited by the company's team in 2024. Sun invested $45 million in $WLFI tokens due to the project's claims of promoting decentralized finance, an issue he deeply cares about, as well as the Trump family's involvement with the project. A spokesperson for World Liberty Financial stated that the company had no comment on the lawsuit. The filing alleges that World Liberty asked Sun to continue investing in 2025, including a request to mint the company's USD1 stablecoin.
However, when it became clear that Sun would not invest or mint USD1 on their terms, World Liberty's principals became hostile towards him. The lawsuit claims that World Liberty induced Sun to make his investments through fraudulent misrepresentations and omissions about the economic rights and liberties associated with purchasing $WLFI tokens.
These alleged misrepresentations include statements about token holder rights, public statements by World Liberty or its executives about governance rights, and statements about the 'freedom to transact.' Sun's suit also alleges that World Liberty, despite presenting itself as a decentralized finance business, had 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 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 supported 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 U.S.
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 and falsely claim that Sun's know-your-customer documentation was inadequate, threatening to report him to U.S. authorities.
Portions of the lawsuit were redacted, with a filing attached to the lawsuit citing a confidentiality provision. Sun stated on social media that he had 'tried in good faith to resolve this situation' and wanted to be treated the same as other early investors.
He also expressed opposition to World Liberty's new governance proposal published on April 15. Sun recently settled charges with the U.S. Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.