Tron's founder, Justin Sun, has taken World Liberty Financial to court, claiming the company froze his $WLFI token holdings without justification, made false representations, and defamed him. The lawsuit, which was filed on Tuesday, states that World Liberty's leadership engaged in an 'illegal scheme to seize property' by locking up Sun's tokens, which he had purchased after being approached by the company's team in 2024. According to the lawsuit, Sun invested $45 million in $WLFI tokens due to the project's claims of promoting decentralized finance, a cause he is passionate about, as well as its association with the Trump family.
A spokesperson for World Liberty Financial declined to comment on the lawsuit. The company had asked Sun to continue investing in 2025, including a request to mint its USD1 stablecoin. However, when Sun refused to invest on their terms by July 2025, the company's principals became hostile towards him.
The lawsuit alleges that World Liberty induced Sun to invest through fraudulent misrepresentations about the economic rights and liberties associated with purchasing $WLFI tokens. These misrepresentations include statements about token holders' rights, public statements by the company or its executives about governance rights, and claims about the 'freedom to transact.' The suit also claims that World Liberty, despite presenting itself as a decentralized finance company, has centralized control over its tokens.
The company 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 change to investors or putting it to a governance vote. The lawsuit argues that this modification was made without alerting token holders to its existence or implications, and that it created a 'blacklisting' function that the company could use at will.
The complaint alleges that freezing Sun's tokens served two purposes: pressuring him to mint $200 million of the company's USD1 stablecoin on his Tron blockchain and manipulating the market price of $WLFI tokens by preventing one of the largest holders from selling. By locking up Sun's position, the complaint argues, World Liberty artificially propped up the market price of $WLFI tokens held by the company's founders and its corporate treasury.
The company's ability to issue, freeze, and reassign tokens may not only undermine its decentralization claims but also raise regulatory concerns. The lawsuit argues that these powers could qualify the company as a money transmitter under US Financial Crimes Enforcement Network rules, subjecting it to registration and anti-money laundering requirements. Other allegations in the complaint include that World Liberty made two overt threats to Sun and his businesses. Chase Herro, one of the company's co-founders, allegedly threatened to burn Sun's $WLFI tokens if Sun did not ask for them to be burned.
Herro also falsely claimed that the know-your-customer documentation submitted by Sun and his companies in connection with their $WLFI token purchases was inadequate, and threatened to report Sun to US authorities. Portions of the lawsuit were redacted, with another filing attached to the lawsuit citing a confidentiality provision. Sun's team is giving the World Liberty team an opportunity to decide whether these redacted provisions should remain sealed. In a post, Sun stated that he had 'tried in good faith to resolve this situation' and that all he wants is to be treated the same as every other early investor who received tokens.
He also expressed his opposition to the new governance proposal published by World Liberty on April 15. Since Trump took office, Sun has visited the US after previously staying away from the country. He was a guest at Trump's first memecoin dinner last year. Sun recently settled charges with the US Securities and Exchange Commission, agreeing to pay a $10 million fine to resolve a case brought by the previous presidential administration.