Tron founder Justin Sun filed a lawsuit in California federal court on Tuesday against World Liberty Financial, a crypto project backed by members of Donald Trump's family. The complaint alleges the firm unlawfully locked Sun's $WLFI tokens and engaged in fraudulent misrepresentations regarding the project's governance and economic rights.
Sun claims the project's leadership used a 'blacklisting' function to freeze his wallet in September without prior notice or recourse. According to Decrypt, Sun became the project's largest token holder after investing $75 million in late 2024.
Allegations of centralized control
The lawsuit alleges that World Liberty Financial, despite marketing itself as a decentralized finance platform, maintains centralized control over its tokens. The Block reported that Sun claims the company modified the $WLFI smart contract in August 2025 to include a function allowing the firm to freeze specific wallets.
CoinDesk reported that the lawsuit alleges World Liberty became hostile toward Sun after he refused to continue investing or mint the project's USD1 stablecoin on their specified terms. The filing claims the firm threatened to burn Sun's holdings and report him to U.S. authorities over purported KYC issues.
Sun has publicly defended his position, stating on X (formerly Twitter) that he has always been an ardent supporter of President Trump's administration efforts to make America crypto-friendly. "They have left me with a choice but to turn to the courts," Sun tweeted, according to Decrypt.
Legal scrutiny of smart contracts
Legal analysts suggest the case could center on the discrepancy between the project's marketing and its technical capabilities. Yuriy Brisov, a partner at Digital & Analogue Partners, told Decrypt that the legal defense weakens when a token is marketed as a decentralized ownership stake but the contract allows an administrator to confiscate tokens unilaterally.
Brisov noted that hiding such a function in the contract's bytecode does not constitute proper disclosure under consumer protection laws.
While CoinDesk reported that Sun's initial investment in 2024 totaled $45 million, Decrypt cited a figure of $75 million for his total holdings. The dispute also involves a recent governance proposal that Sun opposed, which would have imposed a two-year cliff and a vesting schedule on tokens, according to Decrypt.
