Crypto Clash: Billionaire Sun Sues Trump‑Backed Firm Over Frozen Tokens

Justin Sun, the founder of Tron, has filed a lawsuit in California against World Liberty Financial, the cryptocurrency venture launched by former President Donald Trump and his sons. Sun claims that the company illegally locked up about 4 billion WLFI tokens he bought for roughly $45 million in 2024, and that it threatened to “burn” his holdings even while they sat in his digital wallet. The tokens, worth an estimated $320 million today, were obtained after Sun was named an advisor to the firm. The suit alleges that World Liberty secretly embedded a “backdoor blacklisting function” in its smart contracts, giving the company unilateral power to freeze or confiscate token holders’ assets without justification. Sun says the firm has been pressuring him to invest more money, including a $200 million stake in a separate stablecoin token and an equity share. He claims he has tried to resolve the issue, but the company refused to unfreeze his tokens or restore his rights.

World Liberty’s CEO Zach Witkoff dismissed the allegations as “entirely meritless, ” asserting that Sun’s actions forced the firm to protect itself and its users. Eric Trump, a co‑founder, also mocked Sun’s lawsuit on social media, calling it “ridiculous. ” A spokesperson for World Liberty declined to comment, reiterating that Sun is not an advisor and has never held an operational role in the company. The Trump family’s crypto empire, which reportedly earned over $1 billion from World Liberty, routes 75 % of token sale revenue to the Trumps. Investors have raised concerns about the company’s opaque governance, lack of transparency, and slow response to community complaints. The lawsuit paints a picture of a deteriorating relationship: Sun’s tokens are not ordinary shares, so holders lack ownership rights and dividends, but they do have a limited say in governance. Sun’s claim that the firm’s new proposal would bar early investors—who hold a combined 17 billion tokens—from trading until 2030, is a point of contention. He says he strongly opposes the measure but cannot vote because his tokens are frozen. The legal battle unfolds against a backdrop of Trump’s crypto‑friendly policies since taking office in January 2025.

Actions