Justin Sun officially sues World Liberty Financial: Unjustified freezing of 595 million WLFI, governance proposal is a trap

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Justin Sun stated that he has filed a lawsuit against World Liberty Financial in a California federal court, alleging that they froze over 595 million unlocked WLFI tokens without cause and forcibly stripped him of his governance voting rights. (Previous coverage: Justin Sun takes on Trump family DeFi: WLFI is a centralized governance black box, $75M frozen and unable to vote) (Background: Trump family project WLFI goes live! $WLFI opening performance, tokenomics, official buybacks... full summary) Earlier today at approximately 11:00 AM, Sun announced on X: "Today, I filed a lawsuit in California federal court against World Liberty Financial to protect my legal rights as a holder of $WLFI tokens." He also emphasized that he remains an ardent supporter of the Trump administration, noting that the lawsuit targets specific members of the WLFI project team rather than Trump himself: "I do not believe President Trump would approve of these actions if he were aware of them." Today, I filed a lawsuit in California federal court against World Liberty Financial to protect my legal rights as a holder of $WLFI tokens. I have always been—and remain—an ardent supporter of President Trump and his Administration’s efforts to make America crypto friendly.…— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) April 22, 2026 The incident dates back to September 2025. After the tokens were unlocked, Justin Sun transferred approximately $9 million to an external wallet. WLFI subsequently froze his 595 million unlocked tokens, citing a "violation of the investor agreement." April 15 Governance Proposal: Accept or face permanent lock-up On April 15, WLFI released a governance proposal titled "Resolution of Justin Sun WLFI Holdings." Nominally, it aimed to change the status of 62.28 billion tokens from an indefinite lock-up to a fixed vesting schedule. In his announcement, Justin Sun pointedly labeled this proposal a "logical trap." According to the proposal, founders, the team, and advisors would be subject to a 2-year cliff followed by a 3-year linear vesting period; early supporters (holding over 17 billion tokens) would face a 2-year cliff followed by a 2-year linear vesting period. More critically, the proposal includes a "mandatory acceptance clause": if a token holder does not explicitly accept the terms, their tokens will be locked indefinitely. Furthermore, the proposal requires burning 10% of the allocation for advisors, the team, and founders, amounting to up to 4.52 billion tokens. Justin Sun stated that he strongly opposes the proposal, arguing that it is detrimental to the community. Moreover, because his tokens have been frozen, he noted that he is unable to cast a single vote—either for or against—on a proposal that directly affects his interests, potentially leaving him facing an indefinite lock-up. WLFI takes a hardline stance In fact, the two parties had already publicly clashed on X in mid-April. Justin Sun criticized the WLFI token contract for containing a "blacklist backdoor" feature. WLFI countered by accusing Justin Sun of "using a victim playbook to accompany baseless allegations to cover up his own misconduct," and issued a cease-and-desist notice, threatening a multi-million dollar defamation countersuit. Following the formal filing of the lawsuit, WLFI representatives declined to comment. In his post, Justin Sun stated that he had made multiple attempts to resolve the matter privately in good faith, but the WLFI team refused to unfreeze the tokens or restore his rights as a token holder, forcing him to resort to legal action. I have always acted in good faith, attempting to resolve this matter with the World Liberty project team without resorting to legal action. However, the team rejected my requests to unfreeze the tokens and restore my rights as a token holder. They have left me with no choice but to turn to the courts.

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