Trump-backed WLFI, Justin Sun's Token Rights Dispute Lawsuit Escalates

▲ Justin Sun, Donald Trump, World Liberty Financial (WLFI)/AI generated image ©

The conflict has spread to a Trump-backed project... As Justin Sun takes legal action over token freezes, governance risks in the cryptocurrency market are once again highlighted.

According to investment media FXStreet on April 22 (local time), TRON (TRX) founder Justin Sun filed a lawsuit against World Liberty Financial (WLFI), which is supported by Donald Trump, in a U.S. federal court in California. Sun stated that he initiated legal action to protect his rights as a WLFI token holder.

The core of the lawsuit is the freezing of tokens and the restriction of governance rights. Sun claims that WLFI froze his large number of tokens without legitimate reason, deprived him of governance voting rights, and even threatened token burning. He is seeking immediate token unfreezing and damages, citing various legal liabilities including breach of contract, fraudulent inducement, and unjust enrichment.

Sun is WLFI's largest investor, having invested $30 million in November 2024 to acquire 2 billion tokens, and then an additional $15 million in January 2025, totaling $45 million. He claims that during this process, WLFI's total fundraising rapidly increased to approximately $550 million, and he contributed to the project's growth after his investment.

The conflict intensified with a recently unveiled new governance proposal. This proposal includes applying vesting conditions and token burning to some investors. Sun protested that he could not even vote for or against the proposal because his tokens were frozen. He stated that he attempted to resolve the issue with the project but was rejected, ultimately having no choice but to leave it to the court's judgment.

Sun has requested the court to unfreeze tokens, pay damages, and issue an injunction against token burning. However, he drew a line, stating that this lawsuit is unrelated to his personal stance on Donald Trump or his administration. The market evaluates that this dispute, as a clash of rights between a major investor and a project, could set a precedent for similar cases in the future.

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