Justin Sun, the Hong Kong-based founder of the Tron cryptocurrency, filed suit on Tuesday in a U.S. federal court in California alleging that World Liberty Financial - the digital-asset venture co-founded by President Donald Trump and his sons - took covert steps to block his ability to sell WLFI tokens and even threatened to permanently delete those tokens while they remained in his digital wallet.
The complaint states that Sun purchased $45 million of WLFI tokens in 2024 - approximately 3 billion tokens - and was later awarded an additional 1 billion tokens when he was named an advisor to World Liberty. That holding of 4 billion WLFI tokens is valued at roughly $320 million based on the latest WLFI market price cited in the lawsuit.
Sun alleges that, after WLFI tokens began trading in September 2025, World Liberty secretly placed mechanisms into the token contracts that prevented him from selling his tokens. The lawsuit further claims World Liberty threatened to "burn" - a term for permanently deleting tokens - even while the tokens were stored in Sun's wallet.
According to the filing, World Liberty representatives repeatedly sought additional capital from Sun between April and July 2025, including pressing him to acquire $200 million in a separate World Liberty stablecoin and to take an equity stake in the company. The complaint describes Sun as "one of World Liberty's anchor investors" and says he tried in good faith to resolve the dispute directly with the venture's team.
Sun said in a post on the social media platform X that he had attempted to negotiate a resolution but that World Liberty refused to unfreeze his tokens and restore his rights as a token holder. He also said he strongly opposes a governance proposal introduced by the company that would block early investors holding a combined 17 billion tokens from trading those tokens until 2030 - a year after President Trump is scheduled to leave office. Sun said he cannot vote on the proposal because World Liberty allegedly froze his early investor tokens.
The lawsuit recounts a breakdown in relations that has been public for months. In September, Sun publicly accused World Liberty of freezing his tokens. Earlier this month he posted that the firm had secretly embedded what he described as a "backdoor blacklisting function" inside the blockchain contracts that underpin WLFI. In his post, Sun said this function gave World Liberty "unilateral power" to "freeze, restrict, and effectively confiscate the property rights" of token holders without cause or recourse.
World Liberty has pushed back. Zach Witkoff, World Liberty Financial's chief executive and a co-founder, posted on X that Sun's claims "are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly." Witkoff added that Sun "engaged in misconduct that required World Liberty to take action to protect itself and its users." Witkoff is the son of Steve Witkoff, who serves as U.S. Special Envoy for Peace Missions.
Eric Trump, another World Liberty co-founder and son of the president, also posted to X, writing: "The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall." That comment refers to Sun's November 2024 purchase of the artwork "Comedian" by Italian artist Maurizio Cattelan.
A World Liberty Financial spokesperson declined to comment on the lawsuit. Earlier this week a company representative told the press that Sun "is not an advisor at World Liberty Financial, and he has never held an operational role in the company." The White House did not respond to a request for comment on the litigation.
World Liberty is the most prominent of several crypto ventures built around the Trump family name and has already generated more than $1 billion in revenue for the family, the lawsuit notes. The company's bylaws specify that 75% of revenue from WLFI token sales is routed to the Trumps. That revenue arrangement and the company's governance structure have been a focal point of investor scrutiny.
Some investors have complained for months about perceived lack of transparency at World Liberty, its centralized governance, and the company's response to community concerns. These investor grievances are cited in the background to Sun's suit, which frames the dispute as part of larger tensions between early backers and the venture's leadership.
Sun's complaint also documents an exchange of public posts between him and World Liberty. At one point the company responded to Sun's allegations by posting: "We have the contracts. We have the evidence. We have the truth. See you in court pal." The lawsuit reiterates that Sun has long been, and remains, an ardent supporter of President Trump and the Trump family.
The case raises questions about the rights associated with WLFI tokens. World Liberty's token structure, the filing explains, does not confer ownership of the company, nor do tokens entitle holders to dividends in the way traditional shares might. Token holders do, however, possess a limited role in governance under the company's rules - a role Sun says World Liberty has curtailed by freezing tokens and proposing further restrictions on trading for early investors.
The complaint also notes that Sun has invested heavily in a separate Trump-branded meme coin. Separately, the lawsuit references regulatory and legal context around Sun himself: in March, the U.S. Securities and Exchange Commission reached a $10 million settlement with Sun to resolve a 2023 case that had alleged fraud, the sale of unregistered crypto securities, and undisclosed payments to celebrities for promotions. Sun made no admission of wrongdoing as part of that settlement.
Sun's legal action marks a notable escalation in a dispute that has implications for token governance, investor rights, and crypto ventures closely connected to political figures. The litigation will test claims about contract-level controls embedded in token code, the limits of issuer authority over token holders, and how disputes among high-profile backers and issuers play out in court.
Summary
Justin Sun has sued World Liberty Financial in federal court in California, alleging the company illegally froze and threatened to delete his WLFI tokens and installed hidden controls to prevent their sale after trading began in September 2025. Sun purchased $45 million worth of tokens and later received an additional 1 billion tokens as an advisor, bringing his total to 4 billion WLFI tokens valued at roughly $320 million. World Liberty calls the claims meritless and says it acted to protect users. The suit also describes repeated requests from World Liberty for further capital and contests a governance proposal that would prevent early investors from trading until 2030.
Key points
- Sun alleges World Liberty installed concealed contract functions that blocked his ability to sell WLFI tokens and threatened to "burn" them while they were in his wallet - a claim the company disputes. - Impacted sectors: crypto, digital asset governance.
- Sun's WLFI stake totals 4 billion tokens, valued at roughly $320 million based on the latest market price; World Liberty's bylaws route 75% of WLFI token sale revenue to the Trump family. - Impacted sectors: fintech, political-affiliated business ventures.
- World Liberty is proposing a governance measure that would restrict trading by early investors holding a combined 17 billion tokens until 2030, while some investors have raised concerns about transparency and centralized control. - Impacted sectors: crypto markets, investor relations.
Risks and uncertainties
- Legal outcome uncertainty - The lawsuit centers on contract-level code and issuer authority; court findings could affect token-holder rights and governance norms. - Relevant sectors: crypto, digital asset legal frameworks.
- Governance concentration - Allegations of backdoor blacklisting and centralized control raise questions about counterparty risk for token holders and trust in tokenized governance models. - Relevant sectors: crypto, fintech.
- Investor access and liquidity limits - Proposed restrictions on trading by early investors could reduce liquidity for large token holders and alter market dynamics for WLFI. - Relevant sectors: crypto markets, retail investor exposure.