Justin Sun Alleges Trump's World Liberty Threatened to Burn His WLFI Tokens

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In brief - In a lawsuit, Tron founder Justin Sun accused World Liberty Financial of trying to extort him into providing the DeFi project with more capital. - Sun was allegedly told that he could either voluntarily remove his tokens from circulation or leave that up to WLFI’s holders to decide. - Sun says he was wrongly accused of short-selling WLFI and causing the token’s price to plunge 40% in a single day. A lawsuit filed by Justin Sun against World Liberty Financial has accused the Trump-backed crypto venture of trying to extort the Tron founder by allegedly threatening to destroy his WLFI holdings and report the controversial entrepreneur to U.S. authorities. Not long after World Liberty blacklisted 4 billion WLFI in September that Sun had purchased, co-founder Chase Herro allegedly urged the crypto billionaire to voluntarily remove his tokens from circulation as part of an ultimatum, according to a 52-page complaint filed on Tuesday. If Sun refused to do so, Herro allegedly told Sun that the decentralized finance project would ask holders to vote on wiping away his massive investment, a decision that would likely be pushed through—because World Liberty’s leadership controlled an overwhelming amount of WLFI in circulation. Although World Liberty hasn’t explicitly addressed why Sun’s tokens were frozen, the lawsuit paints a picture of how the high-profile fallout may have occurred, in what allegedly amounted to “an effort to coerce Mr. Sun into providing more capital for the benefit of the company.” Portions of the complaint are redacted, suggesting that the disagreement’s scope is not yet fully understood from Sun’s perspective. “The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall,” Eric Trump said in an X post, referring to a piece of luxury art that Sun had purchased in November 2024. “His claims are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly,” said World Liberty co-founder Zach Witkoff—whose father Steve serves as U.S. President Donald Trump’s envoy to the Middle East—in an X post. Decrypt has reached out to World Liberty and Sun representatives for comment. In September, Herro allegedly threatened to report Sun to criminal authorities over "unspecified KYC issues”—months before the Tron founder resolved a three-year legal battle with the SEC, an agreement involving a $10 million penalty that raised corruption concerns among lawmakers and watchdogs. Under the arrangement, Sun neither admitted to nor denied wrongdoing. Sun, who was previously charged with market manipulation, accused World Liberty’s team of attempting to artificially prop up WLFI’s price by trying to prevent a “large and prominent holder from selling and putting downward pressure on the token’s spot market price.” The tokens that Sun received after investing $45 million in World Liberty remain frozen to this day. With WLFI changing hands around $0.08 on Wednesday, the entrepreneur’s holdings were valued at around $318 million, according to CoinGecko. Sun claimed in the lawsuit that he was wrongly blamed by World Liberty for tanking WLFI’s price by 40% on a single day in September. On top of that, Sun alleged that World Liberty improperly accused him of short-selling the token, while also making unfavorable investments. World Liberty was allegedly “upset” that Sun had purchased $100 million worth of an officially licensed meme coin that Trump debuted shortly before his second term began—a project run by a separate team from World Liberty. Still, Sun claims that his purchase of TRUMP meme coins was “pre-approved by a Trump family member.” If true, the pre-approval would suggest that the Tron founder’s investment had granted access to members of Trump’s inner circle. In March, the DeFi project approved a measure providing “guaranteed” access to its team for WLFI’s largest backers. Earlier this month, the feud boiled over in public as Sun accused World Liberty of misconduct and using the crypto community as its “personal ATM.” The company had used WLFI to take out massive stablecoin loans, and Sun said his qualms would be remedied if the DeFi project unlocked his tokens and disclosed the operators of its smart contracts. “Justin’s favorite move is playing the victim while making baseless allegations to cover up his own misconduct,” World Liberty said in an X post. “See you in court pal.”

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