Blockchain billionaire Sun takes Trump family’s crypto firm to court

By Tom Wilson, David Gauthier-Villars and Lawrence Delevingne

April 21 (Reuters) – Crypto entrepreneur Justin Sun on Tuesday ​sued World Liberty Financial, the digital currency venture co-founded by U.S. President Donald Trump and his sons, alleging that World Liberty illegally froze his holdings of tokens issued by the company.

Sun alleged in the lawsuit, filed in a federal court in California, that World Liberty secretly installed tools to prevent the sale of his tokens after they became tradeable in September 2025. The lawsuit also alleges that World Liberty threatened to “burn” – or permanently delete – his holdings, even while they were in Sun’s digital wallet. 

Sun, the Hong Kong-based founder of the Tron cryptocurrency, bought $45 million of WLFI tokens – some 3 billion – and was later awarded a further 1 billion tokens after being named as an advisor to World Liberty, the lawsuit said.

Sun’s portfolio of 4 billion WLFI tokens is worth roughly $320 million, according to Reuters calculations based on the latest WLFI price.

Zach Witkoff, World Liberty Financial’s chief executive and a co-founder, said in a post on X on Wednesday that Sun’s legal claims “are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly.”

“He engaged in misconduct that required World Liberty to take action to protect itself and its users,” added Witkoff, who is the son of Steve Witkoff, U.S. Special Envoy for Peace Missions.

Eric Trump, a son of the president and also a World Liberty co-founder, also posted to X on Wednesday. He wrote “The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall,” a reference to Sun’s November 2024 purchase of a piece of art called “Comedian” by Italian artist Maurizio Cattelan.

A spokesperson for World Liberty Financial ​declined to comment on the lawsuit. A representative of the company had told Reuters earlier this week that Sun “is not an advisor at World Liberty Financial, and he has never held an operational role in the company.”

The White House did not respond to a request for comment.

World Liberty is the most prominent of several lucrative crypto businesses co-founded or controlled by the Trump family, which has already made more than $1 billion from World Liberty, according to a Reuters analysis. World Liberty’s bylaws state that 75% of the revenue from WLFI token sales is routed to the Trumps.

World Liberty is under increasing scrutiny from some of its investors, who have complained for months about what they describe as the company’s lack of ​transparency, centralized governance structure and failure to respond to community complaints, Reuters reported this month. 

In the lawsuit, Sun described himself as “one of World Liberty’s anchor investors.”

World Liberty’s structure means that the WLFI tokens Sun bought in 2024 are not equivalent to standard company shares. The tokens do not carry ownership in the company and holders are not entitled to dividends, although they do gain a limited say in the company’s governance.

SOURING RELATIONSHIP

The lawsuit caps a dramatic deterioration of relations between Sun and World Liberty.

In September, Sun claimed the company had frozen his token holdings, and earlier this month alleged in a post on social media platform X that World Liberty had secretly embedded what he described as a “backdoor blacklisting function” in the blockchain-based contracts used for the tokens. 

That gave World Liberty “unilateral power” to “freeze, restrict, and effectively confiscate the property rights” of token holders without cause or recourse, Sun wrote on X.

World Liberty at that time responded to Sun’s allegations with a post on X that said: “We have the contracts. We have the ⁠evidence. We have the truth. See you in court pal.”

The lawsuit said Sun “has long been (and remains) an ardent supporter of President Trump and the Trump family.”

FROZEN OUT

The lawsuit alleges that World Liberty representatives “repeatedly contacted and pressured” Sun to invest additional capital in the venture between April and July 2025, including requests to commit to acquiring $200 million in a separate World Liberty stablecoin token and to acquire an equity stake in the company.

Sun said in a post on X on Wednesday he had “tried in good faith” to resolve his complaints with World Liberty, adding its team “refused my requests to unfreeze my tokens and restore my rights as a token holder.”

A measure proposed by the company last week would restrict early investors holding a combined 17 billion tokens from being able to trade all of their tokens until 2030, a year after the president is scheduled to leave ​office. 

Sun said he “strongly opposes” the new governance proposal, but could not vote on it as World ​Liberty had frozen his early investor tokens.

Sun has also invested heavily in President Trump’s so-called meme coin. 

Trump has launched a slate of crypto-friendly policies since returning to the White House in January 2025.

In March, the Securities and Exchange Commission settled a 2023 lawsuit against Sun for $10 million. The lawsuit had alleged fraud, selling unregistered crypto securities and hiding payments to celebrities to promote his products. Sun made no admission of wrongdoing.

(Reporting by Tom Wilson in London, David Gauthier-Villars in Istanbul, Lawrence Delevingne in Boston and Shivani Tanna in Bengaluru; Additional reporting by Ankur Banerjee in Singapore; Editing by Tom Lasseter, Himani Sarkar, Clarence Fernandez and Catherine Evans)