Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company improperly froze his $WLFI token holdings and engaged in fraudulent activities. The lawsuit claims that World Liberty's actions, including altering the smart contract governing $WLFI to add a 'blacklisting' function, allowed the company to freeze tokens without warning. Sun's lawsuit also alleges that World Liberty made false representations about the rights of token holders and threatened him. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
According to the filing, Sun invested $45 million in $WLFI tokens after being solicited by the World Liberty team in 2024, partly due to the project's claimed support for decentralized finance and its association with the Trump family. However, when Sun refused to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company'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 include statements about token holder rights, governance rights, and 'freedom to transact.' The suit also claims that World Liberty, despite presenting itself as a decentralized finance business, has centralized control over its tokens. The company's ability to issue, freeze, and reassign tokens may raise regulatory questions and potentially qualify it as a money transmitter under U.S. Financial Crimes Enforcement Network rules. Other allegations include threats made by World Liberty co-founder Chase Herro to burn Sun's $WLFI tokens and report him to U.S.
authorities. Sun has stated that he tried to resolve the situation in good faith and wants to be treated the same as other early investors. He also expressed opposition to World Liberty's new governance proposal published on April 15.