Justin Sun Sues Trump-Linked Crypto Project Over Alleged $WLFI Extortion Plot

By Jody McDonald April 23, 2026 In Justin Sun, Law, World Liberty Financial

Tron founder Justin Sun has filed a lawsuit against the Trump-backed DeFi project World Liberty Financial, alleging it attempted to extort him out of 4 billion WLFI tokens worth over US$300 million.
Sun claims he was offered an ultimatum to voluntarily withdraw his tokens from circulation or have them forcibly burnt and permanently destroyed.
World Liberty CEO Zach Witkoff claimed in response that Sun’s accusations are a ploy to distract from his own criminal conduct and that the ultimatum was part of a strategy to protect WLFI users.

Scammer versus scammer!

In what shapes as the scammer legal showdown of the century, Tron founder Justin Sun has filed a lawsuit against the Trump-family backed DeFi project World Liberty Financial (WLFI), alleging the project tried to extort him by threatening to burn his WLFI holdings — estimated to be worth around US$320 million (AU$447m) and report him to the US authorities.

According to Sun’s complaint filed in a federal court in California on Tuesday, in September 2025, shortly after World Liberty Financial blacklisted Sun’s 4 billion WLFI tokens, the project’s co-founder, Chase Herro, tried to convince Sun to voluntarily remove his holding from circulation as part of an ultimatum presented to the Tron founder.

Sun claims he was told that if he refused to comply with the ultimatum, World Liberty Financial would hold a vote to destroy Sun’s WLFI holdings — a vote Herro said was sure to pass since a large majority of the project’s voting power is controlled by just a handful of insiders.

World Liberty Financial has never publicly disclosed why Sun’s tokens were frozen. Sun’s filing though, alleges it was part of an attempt to coerce him into “providing more capital for the benefit of the company.”

Some parts of Sun’s complaint had been redacted, leaving some uncertainty about the scope of his allegations.

Eric Trump, co-founder of World Liberty Financial and son of US President Donald Trump, mocked Sun’s filing on X, referring to the Tron founder’s purchase of a banana in 2024 for approximately US$6 million (AU$8.3m).

“The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall,” Trump wrote.

Zach Witkoff, World Liberty Financial’s CEO, claimed on X that Sun’s lawsuit is an attempt by the Tron founder to distract from his own alleged scammy conduct.

“Justin Sun’s recent lawsuit against @worldlibertyfi is a desperate attempt to deflect attention from Sun’s own misconduct. His claims are entirely meritless, and World Liberty looks forward to getting the case thrown out promptly,” Witkoff said.

He [Sun] engaged in misconduct that required World Liberty to take action to protect itself and its users. World Liberty will continue to take all necessary steps to protect its community.

Zach Witkoff, World Liberty Financial CEO

Notably, Zach Witkoff is the son of Steve Witkoff, a well-known New York property developer and long-time friend of Donald Trump, who is currently serving as the Trump administration’s Special Envoy to the Middle East.

Sun’s Got History of His Own

While Justin Sun accuses World Liberty Financial of dodgy dealing, the Tron founder isn’t exactly a clean skin himself.

Accused of fraud, market manipulation and wash trading by the Securities and Exchange Commission (SEC) in 2023, Sun settled his case last month for a fine of just US$10 million (AU$14 million), a substantially lighter penalty than many expected.

It’s widely suspected that Sun’s investment in World Liberty Financial was an attempt to buy leniency from the notoriously corrupt Trump administration. As of 2026, Sun remains the single largest outside investor in World Liberty Financial.