Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm backed by the Trump family, alleging that the company froze his $WLFI token holdings without justification, made false claims, and issued threats against him. The lawsuit, filed on Tuesday, asserts that World Liberty's actions constitute an 'illegal scheme to seize property' and that the company's leadership engaged in fraudulent behavior. According to the lawsuit, Sun invested $45 million in $WLFI tokens after being approached by the World Liberty team in 2024, partly due to the project's association with the Trump family and its claims of promoting decentralized finance adoption. However, when Sun refused to continue investing in 2025, including a request to mint the USD1 stablecoin, 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 $WLFI, and that the company exercised centralized control over its tokens despite presenting itself as a decentralized finance business. The complaint also alleges that 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 disclosure or a governance vote. This modification allegedly enabled World Liberty to freeze Sun's tokens, which served the dual purpose of pressuring him to mint $200 million of the USD1 stablecoin and manipulating the market price of $WLFI tokens. By locking up Sun's position, the complaint argues, World Liberty artificially inflated the market price of $WLFI tokens held by the company's founders and treasury.
The lawsuit raises regulatory concerns, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements. 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 over allegedly inadequate know-your-customer documentation. A spokesperson for World Liberty Financial declined to comment on the lawsuit. Sun stated on social media that he had attempted to resolve the situation in good faith and sought equal treatment as other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15.