A billionaire backer of the Trump family’s cryptocurrency venture has turned on the project, filing a lawsuit that accuses World Liberty Financial of running an illegal scheme against him.
Justin Sun, founder of the multi-billion dollar crypto project TRON, alleges that World Liberty, co-founded by U.S. President Donald Trump and his son Eric Trump, froze all of his tokens, stripped him of voting rights on governance matters, and is now threatening to permanently destroy his holdings by “burning” them, all without justification.
Sun filed the complaint on Tuesday in a federal court in San Francisco, suing for breach of contract, fraud, and conversion, and seeking both damages and injunctive relief.
Sun had been among World Liberty’s most prominent supporters. He invested 45 million dollars in WLFI tokens between November 2024 and January 2025 and received an additional one billion tokens in an advisory capacity. At their peak, his combined holdings were valued at over 1 billion dollars.
He separately purchased 100 million dollars worth of Trump’s meme coins in July 2025 and was even credited by World Liberty with helping rescue the project from a slow start.
That goodwill collapsed in September 2025 when World Liberty froze Sun’s wallet, locking roughly 107 million dollars worth of governance tokens after he attempted to move them. According to the lawsuit, the falling out was triggered by Sun’s refusal to keep investing or agree to mint 200 million dollars worth of World Liberty’s USD1 stablecoin on the project’s terms.
Sun alleges the company secretly embedded a blacklisting function in its smart contract, giving itself the power to freeze his holdings without notice or justification.
Since September, the price of a single WLFI token has fallen from 31 cents to just under 8 cents.
The dispute escalated further in April when World Liberty published a governance proposal on April 15 that Sun argues is designed to punish non compliant investors. Under the proposal, advisor, founder, and partner tokens totalling over 45 billion WLFI would be subject to a two year lock followed by a three year vesting schedule, with a mandatory 10 percent burn on opt in. Because World Liberty froze Sun’s holdings in September, he is unable to vote on the proposal at all.
Sun alleged that certain individuals within World Liberty, including co founder Chase Herro, were exploiting the Trump brand to profit through fraud, though he was careful to distance the dispute from the president himself, stressing that he remains a supporter of Trump and the administration’s crypto agenda.
World Liberty denied any wrongdoing, accusing Sun of playing the victim while making baseless allegations to obscure his own misconduct.
The lawsuit lands amid broader scrutiny of the project. Investors have raised concerns about World Liberty borrowing against its token holdings, and questions have also been raised about the project’s financial health and whether it holds sufficient reserves to back its USD1 stablecoin.
Meanwhile, Sun recently settled separate charges with the Securities and Exchange Commission, agreeing to pay a 10 million dollar fine to resolve a case brought by the previous administration.
Democratic Senator Elizabeth Warren has questioned whether the SEC’s handling of the matter was influenced by Sun’s investments in Trump’s crypto ventures.
Sun had previously faced accusations of paying influencers to promote his companies without disclosing those payments.
