Justin Sun’s dispute with World Liberty Financial has moved into federal court. According to the report, Sun filed suit against the Trump family-backed DeFi project in a California federal court on April 21, 2026, accusing WLFI of freezing his tokens through a backdoor blacklist mechanism. The public clash escalated on July 22, when Eric Trump defended the project and mocked the lawsuit as more absurd than spending $6 million on a banana taped to a wall.
Eric Trump joins WLFI’s public response
After the filing, WLFI co-founder and CEO Zach Witkoff responded on X, calling Sun’s allegations baseless and saying the lawsuit was meant to distract from Sun’s own alleged misconduct. He said the team would protect its users. Eric Trump later reposted Witkoff’s statement and praised the @worldlibertyfi team, adding the now widely shared jab about the $6 million banana.
That exchange quickly turned what had been a project-investor dispute into a broader public fight tied to the Trump family’s support for WLFI.
Sun says his $75 million commitment was effectively frozen
In the complaint, Sun is described as an early investor and the largest outside backer of WLFI, with a pledged investment of about $75 million. He claims that after the token became tradable in September 2025, his WLFI holdings were frozen without warning, cutting him off from rights tied to those tokens.
The lawsuit lays out several accusations. Sun says WLFI embedded a blacklist function in its smart contracts, giving the project the power to freeze or even permanently burn investor tokens. He also argues that the freeze stripped him of governance voting rights. The complaint also claims WLFI pressured him and asked him to promote its stablecoin USD1 on the Tron network. In another allegation, Sun says the project used a large amount of WLFI as collateral on DeFi platform Dolomite to borrow about $75 million in stablecoins, while advancing an unreasonable token unlock proposal.
WLFI says the freeze was a protective measure
WLFI has rejected the claims and taken a hard line. The team says the decision to freeze Sun’s tokens was a legitimate act to protect the project and its users, while suggesting Sun’s conduct had become harmful to the platform. In an earlier social media response, the project said: “We have the contracts, the evidence, and the truth. See you in court pal.”
The case now centers on sharply different narratives: Sun alleges centralized control and misuse of token-related power, while WLFI frames its actions as a defensive measure. With large sums of money, governance rights, and Trump family backing all in the mix, the lawsuit has become one of the most closely watched legal fights in crypto.