A lawsuit has been filed by Tron founder Justin Sun against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump. The lawsuit claims that World Liberty unfairly froze Sun's $WLFI token holdings and made fraudulent representations. According to the lawsuit, World Liberty's leadership engaged in an 'illegal scheme to seize property' by freezing Sun's tokens, which he had purchased after being solicited by the company in 2024. Sun had invested $45 million in $WLFI tokens, reportedly due to the project's claims of promoting decentralized finance and its association with 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 principals 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 and 'freedom to transact.' It is also claimed that World Liberty has centralized control over its tokens, despite presenting itself as a decentralized finance business. 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 lawsuit argues that this modification was used to pressure Sun into minting $200 million of the company's USD1 stablecoin and to manipulate the market price of $WLFI tokens.
By freezing Sun's tokens, World Liberty is accused of artificially propping up the market price of $WLFI tokens held by the company's founders and treasury. The lawsuit also raises regulatory questions, suggesting that World Liberty's ability to issue, freeze, and reassign tokens may qualify it as a money transmitter under US Financial Crimes Enforcement Network rules. Other allegations include threats made by World Liberty co-founder Chase Herro to burn Sun's $WLFI tokens and to report him to US authorities over allegedly inadequate know-your-customer documentation. Sun has stated that he tried to resolve the situation in good faith and wants to be treated the same as other early investors who received tokens.