Justin Sun, the founder of Tron, has initiated a lawsuit against World Liberty Financial, a cryptocurrency and stablecoin company with ties to the family of former U.S. President Donald Trump. The lawsuit claims that World Liberty Financial engaged in an 'illegal scheme to seize property' by locking up Sun's $WLFI token holdings, making false representations, and issuing threats and defamatory statements against him.
According to the lawsuit, Sun invested $45 million in $WLFI tokens after being solicited by World Liberty's team in 2024, partly due to the project's claims of promoting decentralized finance and its association with the Trump family. However, when Sun declined to continue investing in 2025, including a request to mint World Liberty's USD1 stablecoin, the company's principals allegedly became hostile towards him.
The lawsuit alleges that World Liberty made fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens, including statements about token holder rights, governance, and the freedom to transact. It is also claimed that despite presenting itself as a decentralized finance business, World Liberty exerted centralized control over its tokens.
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 disclosing this change to investors or putting it to a governance vote. The lawsuit argues that this modification enabled World Liberty to pressure Sun into minting $200 million of its USD1 stablecoin on the Tron blockchain and to manipulate the market price of $WLFI tokens by preventing one of the largest holders from selling. By freezing Sun's tokens, World Liberty allegedly 'artificially propped up the market price of $WLFI tokens' held by the company's founders and treasury.
The lawsuit raises concerns about World Liberty's ability to issue, freeze, and reassign tokens, potentially qualifying it as a money transmitter under U.S. regulations and subjecting it 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 to 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 to be treated the same as other early investors who received tokens. He also expressed opposition to a new governance proposal published by World Liberty on April 15.