Crypto entrepreneur Justin Sun has filed a lawsuit against World Liberty Financial, a firm associated with Donald Trump, in a California federal court, seeking to unfreeze his tokens and prevent the company from seizing or destroying his holdings. Sun alleges that the firm wrongfully froze his tokens without justification, stripping him of voting rights on governance proposals and threatening to “burn” the assets, effectively erasing his ownership. He stated that attempts to resolve the issue amicably failed, leaving legal action as his only option.
The lawsuit claims that World Liberty, which markets itself as a decentralized finance platform, secretly retained centralized control by modifying its smart contracts. According to Sun, the firm gained the ability to blacklist wallets, freeze tokens, and reallocate assets without governance approval. He further alleges that the company pressured him to support and promote its dollar-pegged stablecoin USD1 on the TRON network and retaliated against him when he refused, raising concerns about the project’s transparency and governance practices.
Sun, who invested $45 million in the venture and became its largest publicly known backer, also accused the company of financial instability, claiming it is nearing collapse due to insufficient reserves. The dispute escalated after a governance proposal sought to lock tokens of non-compliant holders and burn a portion of adviser tokens—moves Sun opposed but could not vote on due to the freeze. The case adds to Sun’s legal history, following his recent settlement with the U.S. Securities and Exchange Commission over prior allegations related to crypto asset distribution and market manipulation.
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