Justin Sun Sues World Liberty Over Frozen WLFI Tokens

Justin Sun filed a 52-page federal complaint in California on Tuesday, accusing World Liberty Financial of freezing about 4 billion WLFI tokens he bought in September and threatening to destroy or force a holder vote to eliminate his holdings unless he provided additional capital.

The filing names World Liberty co-founder Chase Herro and alleges he pressed Sun to voluntarily remove the tokens from circulation. The complaint says Herro warned that if Sun refused, World Liberty would ask WLFI holders to vote to wipe Sun’s stake, a result the filing contends the project could carry out because its leadership controlled a large share of the token supply.

Sun’s complaint says the tokens remain frozen. The filing states Sun acquired the holdings after a $45 million investment. With WLFI trading near $0.08, the complaint cites a valuation of roughly $318 million for the stake.

The complaint alleges World Liberty wrongly accused Sun of short-selling and blamed him for a roughly 40% single-day drop in WLFI’s price in September. The filing calls those allegations false and part of an effort to coerce more capital from Sun.

According to the complaint, World Liberty also threatened to report Sun to U.S. authorities over unspecified know-your-customer issues. The filing notes that threat came months before Sun resolved a separate three-year dispute with the U.S. Securities and Exchange Commission, which resulted in a $10 million penalty and no admission of wrongdoing.

Sun frames the dispute as an attempt to use token freezes and public accusations as leverage to force additional funds. The complaint also alleges World Liberty used WLFI to secure large stablecoin loans and treated investor funds as a source of operational financing. Sun says unlocking his tokens and identifying the operators of World Liberty’s smart contracts would address some concerns.

World Liberty has not provided a detailed public explanation for blacklisting Sun’s tokens. Portions of the complaint are redacted.

The dispute drew public responses from World Liberty backers and leaders. Eric Trump posted on X mocking the lawsuit and referencing an art purchase by Sun. World Liberty co-founder Zach Witkoff posted that Sun’s claims are “entirely meritless” and indicated the company expects the case to be dismissed. World Liberty also posted that Sun was “playing the victim while making baseless allegations” and added, “See you in court pal.”

Sun has publicly criticized World Liberty’s management, alleging the project used WLFI as a “personal ATM” and approved measures guaranteeing access to the team for the largest token holders. The complaint says Sun purchased $100 million of a TRUMP-branded meme coin and that the purchase had been pre-approved by a Trump family member; World Liberty has disputed that account.

The case is set to proceed in federal court in California. Sun is seeking relief for what he describes as wrongful freezing of assets and coercive conduct. World Liberty has indicated it will move to dismiss the suit.