A $75M Crypto Freeze Sparks A Lawsuit – And Puts Trump-Backed WLFI Under Scrutiny

• TRON CEO Justin Sun filed a lawsuit against Trump-backed World Liberty Financial on Tuesday, alleging his tokens were frozen and his governance rights revoked.
• The complaint alleges fraud, conversion, and breach of contract against World Liberty Financial.
• The dispute dates back to September, when the firm allegedly blacklisted Sun’s wallet tied to a position valued at about $75 million.

TRON (TRX) CEO Justin Sun shared on Tuesday that he had filed a lawsuit in California federal court against World Liberty Financial (WLFI), the Trump-backed crypto venture, to protect his “legal rights” as a WLFI token holder. 

The crypto billionaire explained that the Trump-linked project team had wrongfully frozen his tokens, deprived him of his ability to “vote on governance proposals,” and threatened to permanently destroy them by “burning” them. He also said he had tried to resolve the matter privately before turning to the courts. 

The complaint, filed in the US District Court for the Northern District of California, accused World Liberty Financial of misconduct, including fraud, conversion, and breach of contract, and asked the court to order the project to unfreeze the tokens and to stop any efforts to burn or otherwise tamper with them. According to reports, Sun’s WLFI position is worth about $75 million, and the dispute dates back to September last year, when WLFI blacklisted his wallet after he attempted to move tokens. 

TRON’s price was trading at 0.33, up by over 1% during the last 24 hours. On Stocktwits, the retail sentiment around TRX remained in the ‘bullish’ zone, while chatter around it remained in the ‘high’ levels over the past day.

WLFI Governance Proposal Triggers Controversy

The lawsuit comes days after World Liberty Financial introduced a governance proposal covering over 62 billion WLFI tokens. The proposal outlined new vesting terms, including multi-year lockups and a potential 10% token burn for certain holders, while those who do not accept the terms could remain locked indefinitely.

Sun also added that he “strongly [opposed] the new governance proposal,” saying that users who would not “affirmatively accept” WLFI’s terms will have their tokens locked indefinitely.” The TRON CEO called this move “bad for the community.”

Read also: MSTR Stock Reportedly Draws Fresh $747M Bet From Capital Group Amid Bitcoin Rally

For updates and corrections, email newsroom[at]stocktwits[dot]com.