Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump. The lawsuit, filed on Tuesday, alleges that World Liberty Financial unfairly froze Sun's $WLFI token holdings, made false representations, and threatened and defamed him.
According to the lawsuit, Sun had invested $45 million in $WLFI tokens after being approached by World Liberty's team in 2024, partly due to the project's association with the Trump family and its claims of promoting 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 claims that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations allegedly included statements about token holder rights, governance rights, and the 'freedom to transact.' Sun's suit also claims 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 add 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 alleges 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 manipulating the market price of $WLFI by preventing one of the largest holders from selling. By doing so, World Liberty artificially propped up the market price of $WLFI tokens held by its founders and 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's co-founder, Chase Herro, to burn Sun's $WLFI tokens and to report him to US authorities over allegedly inadequate know-your-customer documentation. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
Sun has stated that he tried to resolve the situation in good faith and seeks to be treated like other early investors who received tokens. He also expressed opposition to World Liberty's new governance proposal published on April 15.