NEW YORK, April 23, 2026, 03:45 EDT
Justin Sun is taking World Liberty Financial, the Trump family’s crypto outfit, to court, accusing the firm of unlawfully freezing his WLFI tokens and even threatening to burn them. The lawsuit, filed Tuesday in California federal court, marks another clash over one of the Trump family’s headline crypto ventures.
This case carries weight for World Liberty, which has been trying to pivot away from WLFI token sales. Back in January, the company applied for a U.S. trust-bank charter and at that time reported USD1—their stablecoin pegged to the dollar—had surpassed $3.3 billion in circulation. Then last week, World Liberty floated terms aimed at blocking early investors from fully cashing out before 2030.
Sun, who founded Tron and is based in Hong Kong, alleges World Liberty inserted hidden tools that blocked token sales once WLFI started trading in September 2025. Reuters put the value of his 4 billion WLFI tokens at about $320 million. The lawsuit also claims the freeze cost him his voting rights—significant in a project where the tokens grant only limited governance and don’t amount to regular equity.
Zach Witkoff, chief executive and co-founder at World Liberty, fired back on X, calling Sun’s accusations “entirely meritless.” He said the actions taken were intended to safeguard both the company and its users. A spokesperson echoed that to Reuters, emphasizing Sun has never been an adviser or played any operational role. The White House stayed silent, not responding to requests for comment. Reuters
The complaint says World Liberty reps pushed Sun from April to July 2025 for additional funding—$200 million into USD1, plus an equity stake. World Liberty launched USD1 last year, touting the token as being backed by U.S. Treasuries, dollars, and other cash-like assets.
Competition is stiff. Tether’s USDT and Circle’s USDC control the lion’s share of a stablecoin market topping $310 billion. When USD1 debuted, Kevin Lehtiniitty, who heads Borderless.xyz, didn’t mince words: “building an ecosystem that adopts it is a far harder task.” Reuters
Tensions among World Liberty investors had been simmering. The company last week rolled out a plan to lock up 80% of early holders’ stakes for an extra two years—plus an added two-year vesting on top of that. Spokesman David Wachsman described the move as an effort to preserve “healthy market supply.” Reuters
The move came after pushback around governance issues, perks for major holders, and a controversial “Super Nodes” tier, which granted investors locking up $5 million in tokens direct or favored access to the business development team. Reuters reported the Trump family pulled in upwards of $460 million from World Liberty during the first half of 2025, with later estimates topping $1 billion. The White House, for its part, said in March that Trump remains uninvolved in any deals touching on his constitutional responsibilities. Reuters
The uncertainty stretches beyond this single lawsuit. Should the court allow Sun’s claims to move forward, investors could become more wary about just how much sway supposedly decentralized crypto projects maintain over wallets and token flows. But even if World Liberty wins, it’s not out of the woods—central bankers are already flagging stablecoins for the risk of market fragmentation and potential runs during times of stress.
Back in March, Sun agreed to pay $10 million to resolve a U.S. Securities and Exchange Commission civil fraud case—no admission of wrongdoing. The SEC had shelved the case after Trump took office. These days, Trump is pushing a more crypto-friendly platform in Washington, putting the spotlight on regulation, policy, and his family’s business interests just as the World Liberty dispute heats up.
