Justin Sun sues World Liberty Financial over frozen WLFI tokens

Justin Sun filed a lawsuit Tuesday in U.S. federal court in California against World Liberty Financial, alleging the project froze his WLFI tokens, stripped his governance voting rights and threatened to burn his holdings without justification.

In a post on X, Sun wrote: “They wrongfully froze all of my tokens, stripped me of my right to vote on governance proposals, and have threatened to permanently destroy my tokens by ‘burning' them — all without any proper justification.” He added that World Liberty has refused his requests to unfreeze the tokens and restore his rights as a token holder, leaving him to seek relief in court.

World Liberty posted a response on X accusing Sun of “playing the victim while making baseless allegations to cover up his own misconduct,” and added, “See you in court pal.” The project declined to comment further when contacted about the lawsuit.

Sun, who was once the largest external backer of World Liberty, has increasingly criticized the project after the team froze his tokens. On April 12 he alleged the WLFI smart contract contains an undisclosed blacklisting function that he says enables the team to freeze, restrict or effectively confiscate investor tokens.

The dispute intensified after World Liberty published a governance proposal to convert 62,282,252,205 WLFI tokens from indefinite lockups to fixed vesting schedules. The proposal states that holders who do not affirmatively accept the vesting schedule would remain locked indefinitely but could still participate in governance “subject to the terms of any future unlock proposals.” For early purchasers the plan would impose a two-year cliff followed by a two-year vesting period.

Sun criticized the proposal as illegitimate governance and called it “one of the most absurd governance scams I have ever seen.” He reiterated his opposition and demanded equal treatment with other early investors: “All I want is to be treated the same as every other early investor who received tokens — no better, no worse.”

The complaint marks the latest legal step in a public dispute between Sun and World Liberty. The filing was made in federal court in California; neither party has disclosed a court date or provided full details of the claims and defenses in the suit.