Justin Sun, the founder of Tron, has taken legal action against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump. The lawsuit, filed on Tuesday, accuses World Liberty of unfairly freezing Sun's $WLFI token holdings, making false representations, and issuing threats against him. According to the lawsuit, Sun invested $45 million in $WLFI tokens after being approached by World Liberty's team in 2024, partly due to the project's claimed support for decentralized finance and its connection to 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 attitude towards him allegedly turned hostile.
The lawsuit claims that World Liberty made fraudulent misrepresentations about the rights and freedoms associated with purchasing $WLFI tokens, including statements about token holder governance and the ability to transact freely. It is also alleged that World Liberty exerted centralized control over its tokens, despite presenting itself as a decentralized finance project. In August 2025, World Liberty modified the smart contract governing $WLFI to introduce a 'blacklisting' function, allowing the company to freeze tokens in specific wallets without informing investors or putting the change to a governance vote. The lawsuit argues that this modification was used to freeze Sun's tokens, both to pressure him into minting $200 million of USD1 stablecoin on the Tron blockchain and to artificially support the market price of $WLFI tokens held by World Liberty's founders and treasury.
This ability to issue, freeze, and reassign tokens may not only contradict World Liberty's decentralization claims but also raise regulatory concerns, potentially qualifying the firm as a money transmitter subject to US Financial Crimes Enforcement Network rules. The lawsuit also includes allegations of threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses, including a claim that Herro threatened to burn Sun's $WLFI tokens and report him to US authorities over allegedly inadequate know-your-customer documentation. Portions of the lawsuit have been redacted, with Sun's team offering World Liberty the opportunity to decide whether these sections should remain sealed.
In a statement, Sun expressed his desire to be treated equally to other early investors and announced his opposition to a new governance proposal published by World Liberty. This development comes after Sun settled charges with the US Securities and Exchange Commission last month, agreeing to pay a $10 million fine.