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, claims that World Liberty unfairly locked up Sun's $WLFI holdings, made false representations, and issued threats against him. According to the lawsuit, Sun had purchased $WLFI tokens in 2024 after being solicited by the World Liberty team, investing $45 million in the process. The investment was reportedly made due to the project's claims of promoting decentralized finance, a cause close to Sun's heart, as well as the involvement of the Trump family.
However, by July 2025, when it became clear that Sun would not continue investing on World Liberty's terms, the company's principals allegedly became hostile towards him. The lawsuit alleges that World Liberty induced Sun to make his investments through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens.
These misrepresentations reportedly included statements about token holder rights, public statements by World Liberty or its executives, and claims about the freedom to transact. Sun's suit also claims that World Liberty, despite presenting itself as a decentralized finance business, had centralized control over its tokens. The company allegedly modified the smart contract governing $WLFI in August 2025 to add a 'blacklisting' function, allowing it to freeze tokens in specific wallets without disclosing this change to investors.
The lawsuit argues that this modification was made without a governance vote and was not visible to token holders, even as they had just approved a proposal to make a portion of the supply tradable. By freezing Sun's tokens, the complaint alleges, World Liberty aimed to pressure him into minting $200 million of the company's USD1 stablecoin on his Tron blockchain and to manipulate the market price of $WLFI tokens by preventing one of the largest holders from selling. This, the complaint argues, artificially propped up the market price of $WLFI tokens held by World Liberty founders and the company's corporate treasury.
The lawsuit also 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 in the complaint include threats made by World Liberty co-founder Chase Herro against Sun and his businesses. Herro allegedly threatened to burn Sun's $WLFI tokens if Sun did not request that his tokens be burned, and also falsely claimed that the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to US authorities. Portions of the lawsuit have been redacted, with Sun's team giving the World Liberty team the opportunity to decide whether these provisions should remain sealed.
In a post, Sun stated that he had tried to resolve the situation in good faith and wanted to be treated the same as other early investors who received tokens. He also expressed his opposition to World Liberty's new governance proposal published on April 15. This development comes after Sun settled charges with the US Securities and Exchange Commission last month, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.