Tron founder Justin Sun has initiated a lawsuit against World Liberty Financial, a cryptocurrency firm with ties to the family of former U.S. President Donald Trump, alleging 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 tokens, which he purchased after being approached by the company's team in 2024. According to the suit, Sun invested $45 million in $WLFI tokens due to the project's purported commitment to promoting decentralized finance, a cause he deeply cares about, as well as the involvement of the Trump family. A spokesperson for World Liberty Financial declined to comment on the lawsuit.
The filing states that World Liberty requested Sun to 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 associated with purchasing $WLFI tokens.
These misrepresentations reportedly included statements about token holder rights, public declarations 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, enabling the company to freeze tokens in specific wallets without a governance vote or disclosure to investors.
This modification was made even as token holders had approved a proposal to make a portion of the token supply tradable. The lawsuit argues that the freezing of Sun's tokens served two purposes: to pressure him into minting $200 million of the USD1 stablecoin on his Tron blockchain and to artificially inflate the market price of $WLFI tokens held by World Liberty's founders and its corporate treasury. By locking up Sun's position, World Liberty allegedly propped up the market price of $WLFI tokens held by its founders and treasury. The complaint raises regulatory concerns, 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 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 their destruction and falsely claimed that the know-your-customer documentation submitted by Sun was inadequate, threatening to report him to U.S. authorities. Portions of the lawsuit were 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 opposition to a new governance proposal published by World Liberty on April 15.
Since Trump's presidency, Sun has visited the U.S. after previously avoiding the country and was a guest at a Trump-linked crypto project dinner last year.
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 administration.