Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former U.S. President Donald Trump.
The lawsuit alleges that World Liberty Financial unfairly froze Sun's $WLFI tokens, 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 the USD1 stablecoin, World Liberty's attitude towards him became hostile.
The lawsuit claims that World Liberty made fraudulent misrepresentations about the rights and liberties associated with purchasing $WLFI tokens, including statements about governance rights and the freedom to transact. It is also alleged that World Liberty exercised centralized control over its tokens, contrary to its decentralized finance claims.
In August 2025, World Liberty modified the smart contract governing $WLFI to include 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. This modification allegedly enabled World Liberty 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 artificially propping up the market price of $WLFI tokens held by World Liberty's 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 U.S. Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements. Additional 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 over allegedly inadequate know-your-customer documentation.
Sun has stated that he attempted to resolve the situation in good faith and seeks equal treatment as other early investors who received tokens. He also expressed opposition to World Liberty's new governance proposal published on April 15. This development follows Sun's recent settlement with the U.S. Securities and Exchange Commission, where he agreed to pay a $10 million fine to resolve a case from the previous presidential administration.