Trump-Linked Crypto Firm World Liberty Sued by Billionaire Sun Over Alleged Token Freeze and Governance Control

Crypto entrepreneur Justin Sun has sued World Liberty Financial, the digital currency venture co-founded by US President Donald Trump and his sons, alleging that the company illegally froze his holdings of its tokens.

Sun alleged in the lawsuit, filed in a federal court in California, that World Liberty secretly installed tools to prevent the sale of his tokens after they became tradeable in September 2025. The lawsuit also claims that the company threatened to “burn” - or permanently delete - his holdings, even while they were in his digital wallet.

Sun, the Hong Kong-based founder of TRON, bought $45 million of WLFI tokens - around 3 billion - and was later awarded a further 1 billion tokens after being named an adviser to World Liberty, the lawsuit said.

Sun’s portfolio of 4 billion WLFI tokens is worth roughly $320 million, according to Reuters calculations based on the latest WLFI price.

Zach Witkoff, World Liberty Financial’s chief executive and a co-founder, said in a post on X on Wednesday that Sun’s legal claims “are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly”.

“He engaged in misconduct that required World Liberty to take action to protect itself and its users,” added Witkoff, who is the son of Steve Witkoff, US Special Envoy for Peace Missions.

Eric Trump, a son of the president and also a World Liberty co-founder, posted on X that “the only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall”, referring to Sun’s November 2024 purchase of Comedian by Maurizio Cattelan.

A spokesperson for World Liberty Financial declined to comment on the lawsuit. A representative of the company had earlier told Reuters that Sun “is not an adviser 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.

World Liberty is among several lucrative crypto businesses co-founded or controlled by the Trump family, which has already made more than $1 billion from the venture, according to a Reuters analysis. The company’s bylaws state that 75 per cent of the revenue from WLFI token sales is routed to the Trumps.

The firm is facing increasing scrutiny from some investors, who have complained for months about a lack of transparency, a centralised governance structure, and failure to respond to community concerns, Reuters reported earlier this month.

In the lawsuit, Sun described himself as “one of World Liberty’s anchor investors”.

World Liberty’s structure means that the WLFI tokens Sun bought in 2024 are not equivalent to standard company shares. The tokens do not confer ownership in the company, nor do they entitle holders to dividends, although they provide a limited say in governance.

Souring Relationship

The lawsuit caps a dramatic deterioration in relations between Sun and World Liberty.

In September, Sun claimed the company had frozen his token holdings, and earlier this month alleged in a post on X that World Liberty had secretly embedded what he described as a “backdoor blacklisting function” in the blockchain-based contracts used for the tokens.

This, he said, gave the company “unilateral power” to “freeze, restrict, and effectively confiscate the property rights” of token holders without cause or recourse.

World Liberty responded at the time with a post on X stating: “We have the contracts. We have the evidence. We have the truth. See you in court, pal.”

The lawsuit notes that Sun “has long been (and remains) an ardent supporter” of President Trump and his family.

Frozen Out

The lawsuit alleges that World Liberty representatives “repeatedly contacted and pressured” Sun to invest additional capital in the venture between April and July 2025, including requests to commit to acquiring $200 million in a separate World Liberty stablecoin and to take an equity stake in the company.

Sun said in a post on X on Wednesday that he had “tried in good faith” to resolve his complaints, adding that the company “refused my requests to unfreeze my tokens and restore my rights as a token holder”.

A measure proposed by the company last week would restrict early investors holding a combined 17 billion tokens from trading all of their holdings until 2030 - a year after the president is scheduled to leave office.

Sun said he “strongly opposes” the new governance proposal, but could not vote on it because World Liberty had frozen his early investor tokens.

Sun has also invested heavily in President Trump’s so-called meme coin.

Trump has introduced a slate of crypto-friendly policies since returning to the White House in January 2025.

In March, the Securities and Exchange Commission settled a 2023 lawsuit against Sun for $10 million. The case had alleged fraud, the sale of unregistered crypto securities, and the concealment of payments to celebrities to promote his products. Sun made no admission of wrongdoing.

 

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