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 representations, and issued threats against him. The lawsuit, filed recently, asserts that World Liberty's leadership engaged in an unlawful scheme to seize Sun's property, specifically his $WLFI tokens, which he purchased after being approached by the company in 2024. Sun invested $45 million in $WLFI tokens, reportedly due to the project's claims of promoting decentralized finance, a cause he supports, as well as the involvement of the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
According to the filing, World Liberty asked Sun to continue investing in 2025, including a request to mint the company's USD1 stablecoin. However, when Sun refused to invest on their terms by July 2025, the company's principals allegedly became hostile towards him. The lawsuit claims that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights associated with purchasing $WLFI tokens.
These misrepresentations allegedly included statements about token holder rights, public statements by World Liberty or its executives regarding governance rights, and claims about the 'freedom to transact.' Sun's lawsuit also alleges that World Liberty, despite presenting itself as a decentralized finance company, exerted centralized control over its tokens. The complaint states 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 disclosing this change to investors or putting it to a governance vote. The lawsuit claims that World Liberty's freezing of Sun's tokens served two purposes: to pressure him into minting $200 million of the company's USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI by preventing one of the largest holders from selling.
By locking up Sun's tokens, the complaint argues, World Liberty artificially supported the market price of $WLFI tokens held by the company's founders and 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.
Other allegations in the complaint include threats made by World Liberty's co-founder, Chase Herro, against Sun and his businesses. Herro allegedly threatened to burn Sun's $WLFI tokens if Sun did not request that they be burned and falsely claimed that Sun's know-your-customer documentation was inadequate, threatening to report him to U.S. authorities.
Portions of the lawsuit were redacted, with an attached filing citing a confidentiality provision and offering the World Liberty team the opportunity to decide whether these provisions should remain sealed. In a social media post, Sun stated that he had attempted to resolve the situation in good faith and sought to be treated equally to other early investors who received tokens. He also expressed opposition to World Liberty's new governance proposal published on April 15. Since Trump took office, Sun has visited the U.S.
after previously avoiding the country, including attending a memecoin dinner linked to a different Trump-associated crypto project. Recently, Sun settled charges with the U.S.
Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case from the previous presidential administration.