Crypto entrepreneur Justin Sun has filed a lawsuit against World Liberty Financial, accusing the firm of fraud, theft, and unauthorized technical changes. The complaint, filed on Tuesday, also names World Liberty co-founder Chase Herro, whom Sun describes as a repeat fraudster and tax evader. According to the filing, Sun argues that World Liberty Financial is nearing collapse and could face bankruptcy.
Dispute centers on two technical upgrades
The lawsuit alleges that World Liberty Financial secretly carried out two technical upgrades last year without submitting them to a governance vote. Sun claims those upgrades gave the company the power to freeze and seize WLFI tokens, calling the moves destructive and harmful to token holders.
World Liberty Financial disputes that characterization. The company says the freeze function exists to protect user rights, not to improperly confiscate assets. That disagreement over governance process, technical authority, and the legitimacy of token controls now sits at the center of the legal fight.
Complaint also raises licensing concerns
Beyond the upgrade dispute, the complaint accuses World Liberty Financial of operating an unlicensed money transmission business, potentially violating both federal and state law. That expands the case beyond internal governance into broader compliance and regulatory territory.
World Liberty Financial CEO Zach Witkoff rejected the lawsuit, calling it an attempt to divert attention from Sun’s own conduct. The company also said Sun’s purchase of $100 million worth of TRUMP meme coins played a role in its decision to freeze his WLFI tokens. However, the complaint argues that the purchase had been pre-approved by a Trump family member allegedly involved in both projects.
Broader implications for governance and politically linked crypto projects
Based on the allegations and responses disclosed so far, the case could intensify scrutiny of WLFI’s governance transparency, token-freeze mechanisms, and legal compliance. It also highlights the growing risks where crypto ventures intersect with politically connected branding and influence.