The BRICS TimesTron founder Justin Sun has filed a federal lawsuit against World Liberty Financial Donald Trump’s co-founded crypto project alleging criminal extortion, token freezing, fraud, and threats to destroy his $75 million investment without any justification.
A Big Investor Turns Against a Trump-Backed Crypto Project
Crypto billionaire Justin Sun has sued World Liberty Financial, the digital currency venture co-founded by President Donald Trump. Sun filed the lawsuit on Tuesday in a California federal court. He accuses the company of running an “illegal scheme” to seize his tokens and engaging in criminal extortion. Sun had invested $45 million to purchase 3 billion WLFI tokens between 2024 and 2025. He was also awarded an additional 1 billion tokens as a project adviser. At the time of the token freeze, his total stake was valued at over $75 million, making him the project’s largest known early investor.
Tokens Frozen Without Warning or Vote
Sun alleges that World Liberty secretly altered the smart contract governing WLFI tokens in August 2025. The company added a hidden “blacklisting” function to freeze tokens held in specific wallets. This modification never went to a governance vote. Token holders were not told about it either. The freeze was triggered in September 2025, after Sun transferred roughly $9 million worth of tokens which he says were routine test deposits. “In the dark of night, the company thus created a ‘blacklisting’ function that it could wield at will,” the complaint states. Since the freeze, the WLFI token price has fallen sharply. Sun’s locked position reportedly dropped from over $100 million in value to under half that amount.
Threats to Burn His Holdings and Report Him to Authorities
The lawsuit also accuses World Liberty co-founder Chase Herro of making two direct threats against Sun. First, Herro allegedly told Sun he would burn all his WLFI tokens unless Sun publicly requested the burn himself. Second, Herro reportedly claimed that Sun’s know-your-customer (KYC) documentation was inadequate. He then allegedly threatened to report Sun to US authorities over these unspecified KYC issues. The complaint calls both incidents acts of intimidation designed to pressure Sun into compliance.
Pressure to Mint USD1 Stablecoin on TRON
The suit further claims that World Liberty repeatedly pressured Sun between April and July 2025 to keep investing. This included demands for Sun to commit $200 million to mint the company’s USD1 stablecoin on his own TRON blockchain. Sun declined. According to the lawsuit, once it became clear he would not comply, “World Liberty principals became hostile toward Mr. Sun.” The suit characterises this pressure as “a pressure tactic that itself qualifies as criminal extortion.”
Sun Says Trump Likely Did Not Know
Despite the explosive legal fight, Sun has been careful to separate his grievance from his support for the US President. “I have tried in good faith to resolve this situation with the World Liberty project team without resorting to litigation. But the project team has refused my requests to unfreeze my tokens and restore my rights as a token holder,” Sun said in a post on social network X. He also wrote: “I do not believe President Trump would condone these actions if he knew about them.” He called himself “an ardent supporter of President Trump and his Administration’s efforts to make America crypto friendly.”
Sun Also Blocked from Voting on a New Governance Proposal
Adding to his frustrations, Sun says his frozen tokens have stopped him from voting on a critical governance proposal. World Liberty published the proposal on April 15, 2026. It would impose new vesting terms on early investors and compel them to burn a portion of their token allocations. The lock-in period could extend until 2030, a year after Trump is scheduled to leave office. Sun says he “strongly opposes” this proposal, but cannot vote because his tokens remain frozen.
World Liberty Fires Back And So Does Eric Trump
World Liberty Financial has publicly pushed back against the lawsuit. The company claims it froze Sun’s wallet as a security measure triggered by suspicious transfers, and not as an act of retaliation. “His claims are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly,” said World Liberty co-founder Zach Witkoff on X. Eric Trump was more blunt in his response. “The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall,” he posted on X a jab at Sun’s famous 2024 art purchase.
Sun Claims World Liberty Is “On the Verge of Collapse”
The lawsuit makes a sweeping claim about the project’s financial health. Sun alleges that World Liberty is “on the verge of collapse” and questions whether the company holds sufficient reserves to back its USD1 stablecoin. He cited these concerns as one reason the court should immediately block World Liberty from invalidating or burning his tokens. A spokesperson for World Liberty Financial declined to offer a formal comment to media outlets beyond the social media posts by its co-founders.
Sun’s Own Legal Troubles in the Background
Sun is no stranger to legal battles. In March 2026, he settled a civil fraud case originally filed by the US Securities and Exchange Commission under the Biden administration. He agreed to pay a $10 million fine with no admission of wrongdoing. The original SEC case had alleged fraud, selling unregistered crypto securities, and hiding payments made to celebrities to promote his products. Since Trump returned to the White House in January 2025, Sun has also visited the United States more regularly after previously staying away from the country.
