Justin Sun Sues World Liberty Financial, Alleging Fraud and Unlawful Token Freeze in $75 Million Dispute

Justin Sun filed a federal lawsuit against the Trump-linked World Liberty Financial project, alleging it froze his $75 million WLFI stake, stripped his governance rights, and threatened to burn his tokens to coerce further investment.

Justin Sun, the founder of the Tron blockchain, filed a federal lawsuit against World Liberty Financial in California on April 21, alleging the Trump family-backed DeFi project fraudulently induced him to invest, froze his tokens without justification, stripped his governance rights, and threatened to permanently destroy his holdings. The complaint represents a formal escalation of a public dispute between Sun and WLFI that had already drawn significant attention in the crypto community.

Sun says he initially invested $30 million in WLFI in late 2024, attracted partly by the Trump family’s association with the project and its stated commitment to decentralized finance. He subsequently built his position to approximately $75 million in WLFI tokens and was named as an advisor to the project. The lawsuit alleges World Liberty’s leadership engaged “in an illegal scheme to seize property” by freezing his tokens and that he was told he would be reported to US authorities over purported KYC violations if he did not continue investing and mint the project’s USD1 stablecoin on their terms.

This story is an excerpt from the Unchained Daily newsletter.

The freeze occurred in September 2025, when WLFI used an embedded smart contract blacklist function to lock Sun’s wallet after he transferred approximately $9 million worth of tokens. Sun says the transfers were routine test deposits. His position at the time of the freeze was worth over $100 million, but the WLFI price has since declined sharply. Sun also opposes a governance proposal WLFI published on April 15 that would impose new vesting terms and compel early investors to burn allocations, but says his frozen tokens prevent him from voting on it.

Sun was careful to separate the lawsuit from his political support. “I also want the community to know that I strongly oppose the new governance proposal World Liberty published on April 15,” he wrote on X, adding that the lawsuit targets “certain individuals on the World Liberty project team,” not President Trump or his administration.

Sun settled separate SEC fraud charges in March 2026, paying a $10 million fine with no admission of wrongdoing. Portions of the lawsuit remain under seal due to confidentiality provisions.