Tron founder Justin Sun has initiated a legal battle against the crypto venture backed by the Trump family, filing a lawsuit in California federal court. According to his tweet on Tuesday, the project froze his tokens, revoked his voting rights, and threatened destruction of his holdings without notice or recourse.
Sun tweeted: “Today, I filed a lawsuit in California federal court against World Liberty Financial to protect my legal rights as a holder of $WLFItokens. I have always been—and remain—an ardent supporter of President Trump and his Administration’s efforts to make America crypto friendly.” (@justinsuntron, April 22, 2026).
Sun expressed that he was compelled to seek judicial intervention, doubting U.S. President Donald Trump would approve of such actions if aware.
The legal conflict places Sun, a polarizing figure in the crypto world, against one of its most politically intertwined projects. In late 2024, Sun became World Liberty’s largest token holder after investing $75 million in WLFI. His account was blacklisted last September following suspected unauthorized transfer activities, which he denies.
“I seek equal treatment with other early investors—no more, no less,” Sun stated on Tuesday.
Decrypthas contacted both Sun and World Liberty Financial for comments. The dispute became public earlier this month when Sun alleged that World Liberty embedded a secret backdoor in the smart contract governing WLFI, enabling unilateral token freezing without notice or recourse. He criticized the project’s leadership as “bad actors,” accusing them of exploiting the crypto community.
Sun also contested a governance proposal introducing a two-year cliff and vesting schedule, arguing frozen tokens prevent his voting participation due to potential indefinite lock-ups. Experts suggest the case hinges on discrepancies between WLFI’s marketing and its smart contract permissions.
“The defensibility weakens sharply when a token is marketed as decentralized ownership, yet the contract allows unilateral confiscation,” noted Yuriy Brisov of Digital & Analogue Partners. He emphasized that disclosure must be clear and conspicuous under U.S. and EU consumer-protection laws.
Joshua Chu, lawyer and co-chair of the Hong Kong Web3 Association, highlighted the need for transparency in AML and sanctions-type powers on-chain. It is crucial to determine whether there was a legitimate policy rationale for the freeze or if it was an arbitrary centralization within a DeFi-marketed project.
Chu predicted World Liberty would argue that this was a compliance action based on contract terms, not arbitrary punishment. Even Alex Chandra of IGNOS Law Alliance suggested courts might examine investor fairness and whether governance rights could be changed unilaterally.
Brisov pointed out potential risks for World Liberty in private litigation, actions by state attorneys general like those in New York and California, and non-U.S. regulatory decisions on WLFI’s marketing legality.
As of now, the WLFI token trades at about $0.08, a 76% drop from its September peak of $0.33, according to CoinGecko.