Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the Trump family, alleging that the company had unjustly frozen his $WLFI token holdings and made fraudulent representations. The lawsuit, filed on Tuesday, also claims that World Liberty's leadership engaged in an illegal scheme to seize Sun's property and made threats against him. According to the filing, Sun had invested $45 million in $WLFI tokens after being solicited by the World Liberty team in 2024, partly due to the project's association with the Trump family.
However, when Sun refused to continue investing in 2025, World Liberty's principals became hostile towards him. The lawsuit alleges that World Liberty made fraudulent misrepresentations about the rights and liberties associated with purchasing $WLFI tokens, including statements about token holder governance and the freedom to transact.
It is also claimed that World Liberty exerted centralized control over its tokens, contrary to its decentralized finance claims. 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 to investors. The complaint argues that this modification was used to freeze Sun's tokens, pressuring him to mint $200 million of the company's USD1 stablecoin and artificially propping up the market price of $WLFI tokens held by World Liberty founders. The lawsuit raises regulatory questions, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter, subject 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 report him to U.S. authorities. Sun has stated that he tried to resolve the situation in good faith and seeks to be treated equally to other early investors who received tokens.