Sun's lawsuit, filed on Tuesday, alleges that World Liberty secretly installed tools to prevent the sale of his tokens after they became tradeable in September 2025. He claims the company threatened to 'burn' – or permanently delete – his holdings, even while they were in his digital wallet. According to Reuters calculations based on the latest WLFI price, Sun's portfolio of 4 billion WLFI tokens is worth roughly $320 million.
Sun bought $45 million of WLFI tokens – some 3 billion – and was later awarded a further 1 billion tokens after being named as an advisor to World Liberty. He has said he spent at least $75 million on World Liberty tokens, at one point becoming its largest investor. However, a spokesperson for World Liberty said Sun 'is not an advisor at World Liberty Financial, and he has never held an operational role in the company.'
I have always been an ardent supporter of President Trump and his crypto friendly policy.
World Liberty is the most prominent of several lucrative crypto businesses co-founded or controlled by the Trump family. The Trump family has already made more than $1 billion from World Liberty, according to a Reuters analysis. World Liberty's bylaws state that 75% of the revenue from WLFI token sales is routed to the Trumps. The company was co-founded by Trump's three sons and lists Trump as a co-founder emeritus.
World Liberty was launched in 2024 in the heat of Trump's third presidential campaign. Trump was removed from any official positions at World Liberty upon taking office. The White House has said Trump is not involved in managing his family's crypto holdings. World Liberty promised to become a world leader in the crypto and decentralized finance space.
This is the opposite of decentralization. This is a trap door marketed as an open door. I denounce the ongoing token scandals by the bad actors at WLFI.
Sun accused World Liberty Financial of setting up a system that grants company officials unilateral power over user accounts, including the ability to freeze them. According to analysis by Bubblemaps, the value of the holdings Sun has allegedly been unable to move has declined by more than $80 million, to about $43 million, though this appears inconsistent with the $320 million portfolio valuation. The value of World Liberty's primary token, WLFI, has lost 74% of its value since August, and as of Monday it was trading at around 8 cents.
World Liberty Financial declined to comment on the lawsuit directly. However, World Liberty responded by accusing Sun on social media of engaging in misconduct himself that warranted the freeze and seeming to threaten a lawsuit. A representative for World Liberty referred NBC News to the comments on its X account.
We have the contracts. We have the evidence. We have the truth. See you in court pal.
The lawsuit caps a dramatic deterioration of relations between Sun and World Liberty. In September, Sun claimed that the company had frozen his token holdings. Earlier this month, Sun alleged in a post on social media platform X that World Liberty had secretly embedded what he described as a 'backdoor blacklisting function' in the blockchain-based contracts used for the tokens.
World Liberty is under increasing scrutiny from some of its investors, who have complained for months about what they describe as the company's lack of transparency, centralized governance structure and failure to respond to community complaints. World Liberty's structure means that the WLFI tokens Sun bought in 2024 are not equivalent to standard company shares. The tokens do not carry ownership in the company and holders are not entitled to dividends, although they do gain a limited say in the company's governance.
I am one of World Liberty’s anchor investors.
Sun has faced regulatory challenges himself. The Securities and Exchange Commission charged Sun in 2023 with fraud over crypto trades and illicit promotion. In March, the SEC case against Sun was dismissed after he agreed to pay a $10 million fine.
The lawsuit represents the most prominent instance yet of a crypto insider aligned with President Donald Trump calling out his family's crypto dealings. Democrats have said the Trump family's crypto dealings benefit from the president's authority. According to The Guardian - Main UK, Justin Sun described himself as 'one of World Liberty's anchor investors.'
This gave World Liberty 'unilateral power' to 'freeze, restrict, and effectively confiscate the property rights' of token holders without cause or recourse.
Eric Trump remains a prominent figure in the crypto world despite the family's official distance from World Liberty management. Eric Trump will be the keynote speaker at the Bitcoin 2026 conference this summer. His continued visibility highlights the Trump family's ongoing involvement in the crypto sector.
The case unfolds against a broader backdrop of crypto platform proliferation and market volatility. Dozens of crypto platforms have launched in recent years, all touting their own tokens, each governed by the companies' own rules. Many crypto platforms offer certain assurances around security and how the company's money will be handled. Some crypto tokens have risen in value, but broadly the values of most tokens have declined along with the broader crypto market.
The lawsuit was filed in a federal court in California, specifically the U.S. District Court for the Northern District of California. The White House did not immediately respond to a request for comment about the lawsuit or the allegations against the Trump family's company.
Several key questions remain unresolved in this high-stakes legal battle. The specific misconduct that World Liberty alleges Justin Sun engaged in to warrant the account freeze has not been detailed publicly. Similarly, the legal basis or contractual terms that World Liberty claims justify its ability to freeze or burn tokens remains unclear. The current status of the lawsuit filed by Justin Sun in federal court in California is not yet known beyond its initial filing. It is also unknown whether other investors have experienced similar issues with World Liberty Financial's token management. Despite official statements of non-involvement, the extent of President Trump's current influence over World Liberty Financial remains uncertain.