Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former US President Donald Trump, alleging that the company froze his $WLFI token holdings without justification, made false representations, and issued threats against him. The lawsuit, which mentions Sun's support for Trump, claims that World Liberty's leadership engaged in an illegal scheme to seize Sun's tokens, which he purchased in 2024 after being approached by the company's team. At the time, Sun invested $45 million in $WLFI tokens, reportedly due to the project's claims of promoting decentralized finance, a cause close to his heart, as well as its association with the Trump family.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. According to the filing, World Liberty requested that Sun continue investing in 2025, including a proposal to mint the company's USD1 stablecoin. However, when it became apparent that Sun would not invest on their terms by July 2025, the relationship between Sun and World Liberty's principals turned hostile.
The lawsuit alleges that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and freedoms associated with purchasing $WLFI tokens. These misrepresentations reportedly 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 suit also claims that despite presenting itself as a decentralized finance business, World Liberty maintained centralized control over its tokens.
The complaint states that 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 informing investors or putting it to a governance vote. This modification allegedly enabled World Liberty to freeze Sun's tokens, serving a dual purpose: pressuring him to mint $200 million of the company's USD1 stablecoin on the Tron blockchain and manipulating the market price of $WLFI by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, World Liberty artificially supported the market price of $WLFI tokens held by the company's founders and treasury. This capability may not only undermine World Liberty's decentralization claims but also raise regulatory concerns, potentially qualifying the firm as a money transmitter under US Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements.
Other allegations 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 the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to US authorities. Portions of the lawsuit have been redacted, with an attached filing citing a confidentiality provision that allows the World Liberty team 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 equal treatment as other early investors who received tokens.
He also expressed his opposition to World Liberty's new governance proposal published on April 15. Since Trump's presidency, Sun has visited the US after previously avoiding the country and was a guest at a Trump-linked crypto project dinner last year.
Recently, Sun settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case from the previous administration.