Justin Sun has filed a lawsuit in a California federal court against World Liberty Financial, a DeFi project backed by Eric Trump and Donald Trump Jr., over a dispute involving frozen tokens and governance control.
Sun says the issue began when the team froze all his WLFI holdings, removed his voting rights, and allegedly threatened to permanently burn his tokens. He calls this the breaking point.
He also says he tried multiple times to resolve the matter privately, but the team refused to unfreeze his tokens or restore his rights, leaving him with no option but to move to court.
“I have tried in good faith to resolve this situation with the World Liberty project team without resorting to litigation. But the project team has refused my requests to unfreeze my tokens and restore my rights as a token holder. They have left me with no choice but to turn to the courts.”
Sun’s main issue is control over his tokens. He says his WLFI holdings are locked, and he’s fully excluded from governance decisions. He argues there was no clear explanation or justification for the freeze, and that being locked out also prevents him from voting on matters affecting his own investment.
He adds that he was once a major early backer of the project but is now in direct conflict with it.
However, the dispute intensified after a governance proposal from World Liberty Financial introduced stricter rules, including:
Sun criticized this setup, saying it effectively forces investor compliance, especially since frozen holders cannot vote against the proposal in the first place.
Tension increased further when Sun alleged that the WLFI smart contract may contain a hidden blacklisting function capable of freezing or restricting tokens at will. He raised concerns about transparency and control within the system.
WLFI rejected these claims, accusing Sun of “playing the victim” and making baseless allegations, while also suggesting potential legal action against him, turning the dispute into a full standoff.
Despite the lawsuit, Sun clarified that his support for U.S. President Donald Trump and the administration’s pro-crypto stance remains unchanged. He stresses that the dispute is strictly with the project team, not political leadership.
As both sides refuse to back down, the case has now moved into the legal system, raising wider questions about investor rights, governance power, and control in politically linked crypto projects.
CoinPedia has been delivering accurate and timely cryptocurrency and blockchain updates since 2017. All content is created by our expert panel of analysts and journalists, following strict Editorial Guidelines based on E-E-A-T (Experience, Expertise, Authoritativeness, Trustworthiness). Every article is fact-checked against reputable sources to ensure accuracy, transparency, and reliability. Our review policy guarantees unbiased evaluations when recommending exchanges, platforms, or tools. We strive to provide timely updates about everything crypto & blockchain, right from startups to industry majors.
All opinions and insights shared represent the author's own views on current market conditions. Please do your own research before making investment decisions. Neither the writer nor the publication assumes responsibility for your financial choices.
Sponsored content and affiliate links may appear on our site. Advertisements are marked clearly, and our editorial content remains entirely independent from our ad partners.
Iran has launched Hormuz Safe, a state-backed maritime insurance platform accepting cryptocurrency payments, including Bitcoin.…
Zcash (ZEC) has emerged as one of the strongest-performing cryptocurrencies over the past 24 hours,…
XRP’s strong popularity in Japan and South Korea is tied to something much bigger than…
On-chain analysts report that a Solana trader tied to wallet “GyBRmk” sold 21,911 SOL for…
Ethereum, the second-largest cryptocurrency, has erased all its May gains after falling nearly 10% over…
Hyperliquid (HYPE) is back in the spotlight as ETF momentum and renewed buying pressure fuel…
