Tron founder Justin Sun has filed a lawsuit against World Liberty Financial (WLFI), a crypto project backed by the Trump family. In response, WLFI denied Sun’s claims and stated that it expects the case to be dismissed.
In a statement posted on X Wednesday, World Liberty co-founder Zach Witkoff called Sun’s lawsuit “entirely meritless” and said the company took action to protect itself and its users.
Soon after, Eric Trump also mocked the case in a separate X post, saying the lawsuit was “ridiculous.”
Justin Sun details token freeze claims in WLFI lawsuit
The dispute started after Sun filed a lawsuit in the California federal court against WLFI. He accused the company of breach of contract, fraud, and conversion over the way it handled his WLFI tokens.
Sun said WLFI added a blacklist function to its smart contract last August without clearly telling investors. He claimed this gave the team the power to freeze tokens when it wanted.
He also said WLFI restricted his wallet a month later after he moved some unlocked tokens worth about $9 million to $11 million.
According to Sun, the project then froze hundreds of millions of his tokens. This stopped him from selling them and from taking part in governance votes.
Sun further claimed that WLFI threatened to burn the frozen tokens, thereby removing their value.
He also accused the project of using investor tokens as collateral in large decentralized finance loans, including a deal worth around $75 million involving platforms such as Dolomite.
In the lawsuit, Sun asked the court to unfreeze his tokens, award damages, stop any more freezes or token burns, and grant restitution.
WLFI and Eric Trump hit back
Witkoff strongly pushed back. In his statement, he said Sun’s lawsuit was “a desperate attempt to deflect attention” from Sun’s own alleged misconduct.
He also said World Liberty looked forward to getting the case thrown out quickly. WLFI’s CEO did not publicly specify the alleged misconduct in detail but he claimed that the company did so because it had to safeguard its community.
“He engaged in misconduct that required World Liberty to take action to protect itself and its users. World Liberty will continue to take all necessary steps to protect its community,” Witkoff stated.
Eric Trump then added more attention to the fight with a mocking post of his own.
He wrote that the only thing more ridiculous than the lawsuit was Sun spending $6 million on a banana duct-taped to a wall, a reference to the artwork Sun famously bought. He also said he was proud of the World Liberty team.
Sun was not just a small investor in WLFI. He was among the project’s earliest and biggest backers. He first put in about $30 million during the early phase in late 2024. Later, he raised that amount to around $75 million.
At the time, Sun openly supported the project. He also praised its close ties to the pro-crypto approach linked to the Trump administration. However, that relationship has now broken down.
In a post on X, Sun said he tried to solve the matter privately before taking it to court. He also reiterated his support for President Trump but criticized some people on the WLFI team.
WLFI’s proposal adds pressure to the dispute
The dispute has become more serious in recent weeks.
On April 15, WLFI released a governance proposal covering about 62.3 billion locked tokens. Under the plan, early supporter tokens would stay locked for two years first. After that, they would unlock slowly over another two years.
The proposal sets even stricter terms for founder, team, adviser, and partner tokens. Those tokens would face a two-year lockup, followed by a three-year vesting period.
WLFI also proposed burning up to 4.52 billion insider-linked tokens. That would equal about 10% of those holdings.
The plan adds more pressure on token holders. WLFI said anyone who does not accept the new terms would be locked indefinitely.
Sun said he strongly opposed it, but could not take part in that vote because WLFI had already frozen his tokens.
For now, both sides seem ready for a legal battle. The next step will likely be early court review, where a judge will decide if Sun’s claims can move forward.
