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- Justin Sun says he has filed a lawsuit against World Liberty Financial over the freezing of his WLFI token holdings.
- The Tron founder claims his voting rights were suspended and says he was threatened with the permanent destruction of his tokens through a burn.
Justin Sun has escalated his dispute with World Liberty Financial into federal court, turning what had been a public governance fight into a legal one.
In a statement posted on X, the Tron founder said he had filed a lawsuit in California federal court against World Liberty Financial to protect what he described as his legal rights as a holder of WLFI tokens. Sun alleges that project insiders froze his holdings without justification, cutting him off from both access and influence inside the protocol.
Sun says his tokens were frozen and his rights suspended
The complaint, as Sun framed it publicly, is not only about the tokens themselves. He said his voting rights were suspended, which gives the dispute a governance dimension as well as a property one.
That matters because token projects often present governance rights as one of the core features of ownership. If a holder can be excluded from voting while still nominally holding the asset, the question becomes whether those rights were ever secure to begin with, or whether they remain subject to discretionary control from the team behind the protocol.
Sun also said he was intimidated with the prospect of a token burn that could permanently destroy his frozen holdings. That allegation, if pursued in court, is likely to draw close attention because it moves the dispute beyond a routine freeze and into the more serious territory of potential confiscation.
The lawsuit builds on earlier allegations about a blacklist mechanism
The filing did not emerge in a vacuum. Sun had previously accused Trump-linked World Liberty Financial of embedding what he called a hidden “backdoor blacklisting” feature into the project. At the time, he argued that the mechanism allowed insiders to freeze, restrict and effectively confiscate user assets.
The new lawsuit appears to take that earlier criticism and anchor it in a personal claim of harm.
For now, the case puts World Liberty Financial under sharper legal scrutiny just as questions around token governance, admin controls and investor protections are becoming harder for crypto projects to wave away. Public blockchains may be designed for transparency, but disputes like this keep returning to the same issue. Who really controls the asset when the team still controls the switch?
