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Justin Sun, the founder of Tron, has filed a federal lawsuit against World Liberty Financial (WLFI), a decentralized finance project backed by the Trump family, escalating a dispute over frozen tokens and alleged coercive practices into the courts.
Sun is suing WLFI to recover roughly $75 million in tokens, according to Reuters. The complaint alleges that WLFI blocked access to Sun’s holdings and interfered with internal processes.
Court filings dated April 21-22 state that Sun is seeking to recover about $75 million in WLFI tokens. Sun claims the project carried out what he described as an illegal scheme to seize property.
Sun says he initially invested $30 million, and that his position grew to nearly $75 million over time. He argues that his rights were later stripped without justification.
The lawsuit includes claims of fraudulent inducement, breach of contract, conversion, and unjust enrichment. Sun’s allegations focus on how the project handled investor protections, and the case could become a reference point for future disputes in decentralized finance.
A central issue in the complaint is a backdoor blacklisting function in WLFI’s smart contracts. Sun alleges this mechanism was used to freeze his wallet in September 2025.
Sun says the freeze affected roughly 540 million unlocked tokens and also included about 2.4 billion locked tokens. He alleges the action blocked him from accessing or moving his assets.
Sun also claims the freeze prevented him from voting on governance proposals, which he says removed his influence as a major investor.
Sun further alleges coercion by WLFI representatives. He claims they threatened to report him for KYC violations. He also says they warned his tokens could be permanently burned unless he continued to support the project.
Tensions increased after a governance proposal published on April 15. Sun says the proposal aimed to change vesting terms and required early investors to burn part of their holdings.
Sun rejected the proposal, describing it as a sham with a predetermined outcome and arguing that the process lacked genuine decentralization.
He also warned that the project could be nearing collapse, saying the changes were designed to extract value from investors. Reuters reported that this concern appears to have contributed to the decision to file the lawsuit.
WLFI has denied the allegations. The project says the wallet freezes were routine security actions intended to address high-risk activity and that its measures were consistent with protocol rules.
Representatives deny targeting Sun specifically. In a public post on April 15, WLFI said, “We have the contracts. We have the evidence. We have the truth. See you in court.”
Sun has avoided direct criticism of President Donald Trump. He said he separated the administration from WLFI’s management and reiterated support for Trump’s pro-crypto stance, while suggesting certain individuals in the project acted independently and that such behavior may not reflect the administration’s position.
The dispute highlights growing tensions in DeFi governance and raises broader questions about investor protections as the sector matures.
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