The alliance between Justin Sun and World Liberty Financial fell apart before everyone’s eyes. The TRON founder filed a lawsuit against the project associated with Donald Trump’s family, claiming his tokens were frozen, his management rights were revoked, and there was an attempt to nullify his stake through an asset burn mechanism.
A year ago, the situation looked different. Sun was considered a key investor in WLFI, invested $75 million, and received an advisory role. He also became the largest holder at a private dinner for TRUMP meme token owners. Now, one of the project’s main supporters has become a plaintiff.
Sun Disappears From Key TRUMP Event
In 2025, Justin Sun was the central figure at a private dinner for the largest TRUMP holders. His name was at the top of the participant ranking, and he actively covered the event on social media.
This year, he was absent. Instead of attending the event, Sun filed a lawsuit against WLFI in federal court in San Francisco. This sharply changed the perception of a story that until recently looked like one of the most prominent alliances between politics and the crypto industry.
The lawsuit states that the WLFI team restricted access to his assets, deprived him of the opportunity to participate in management, and created conditions for the destruction of his stake. The claims include breach of agreements, fraud, and illegal seizure of funds.
WLFI Rejects Accusations
The project disagreed with the accusations. WLFI representatives stated that Sun’s claims are unfounded and distort the real situation.
WLFI co-founder Eric Trump responded publicly. He compared the situation to buying a banana taped to a wall, hinting at Sun’s well-known deal in the contemporary art world. The conflict quickly became public.
This is a sensitive moment for WLFI. Sun was one of the investors who helped the project through its early launch phase. Now his accusations affect trust in the token model and relationships with other holders.
Sun Supported Project During Weak Demand
After WLFI’s announcement in September 2024, interest in the token was limited. The sale started with the goal of raising $300 million, but demand remained weak.
The situation changed after Sun joined. He bought tokens worth $30 million, which allowed the project to overcome an important profitability threshold. Later, he increased his investment by another $45 million, bringing the total to $75 million.
After that, the TRON founder was included among the advisors. During that period, he openly supported the project and emphasized the role of the US in blockchain industry development.
Alliance Peaked at TRUMP Dinner
The peak of cooperation came in May 2025. At that time, the largest TRUMP holders gathered for a private dinner at Donald Trump’s golf club in Virginia.
Sun was in the spotlight. His name topped the list of participants, reflecting the largest individual stake among those invited.
Later, he announced plans to invest another $100 million in the TRUMP meme token. At that time, the alliance seemed stable and mutually beneficial for both sides.
SEC Case Developed Amid the Deal
In parallel with Sun’s investments in Trump’s projects, proceedings with the US Securities and Exchange Commission continued. In 2023, the regulator accused him of market manipulation and artificially inflating the token’s price.
It involved hundreds of thousands of trades and profits of about $32 million. It was also alleged that paid celebrity posts were used for promotion without disclosing the advertising.
After Trump’s inauguration, the case slowed down. The parties requested a pause to discuss settlement, and later the conflict was closed after a $10 million fine was paid.
Political Reaction Increased Pressure
The case closure drew criticism. Senator Elizabeth Warren linked the SEC’s decision to Sun’s investments in Trump’s projects.
According to her, investments of about $90 million could have influenced the leniency of the final decision. This assessment increased the political component of the story.
The situation went beyond a corporate dispute and became part of a broader discussion about the influence of large investors on regulation.
Conflict Was Developing in Advance
The confrontation began before the lawsuit was filed. In September, WLFI blacklisted Sun’s wallet, explaining it as a standard security procedure.
Later, Sun stated that the token system included a mechanism allowing user assets to be restricted or seized. This became one of the key points of conflict.
After public statements, tensions increased. WLFI suggested resolving the dispute legally, and Sun took advantage of this opportunity.
Sun Avoids Direct Accusations Against Trump
In the lawsuit, Sun does not direct his main claims at Donald Trump. He refers to the actions of individual WLFI team members and highlights co-founder Chase Herro.
At the same time, Sun notes that the president himself would not support such decisions. He emphasizes that he expects equal treatment as one of the early investors.
This position seems cautious. Even in the context of a legal dispute, he avoids direct conflict with a political figure.
This Is a Test of the Model for WLFI
The legal process calls into question key elements of the project. If the token freeze actions are found to be unjustified, it could affect trust in the governance system and holder rights.
For investors, this is a signal. The possibility of asset restriction becomes a risk factor that must be considered when evaluating similar projects.
WLFI will have to prove that its actions complied with the stated rules. The outcome of the case and the project’s future perception depend on this.
What’s Next?
A key stage will be the case’s consideration in federal court. The decision will determine how the market evaluates the WLFI team’s actions and Sun’s position.
If the court supports the plaintiff, the project will face serious consequences. Otherwise, WLFI will be able to confirm its legal position and reduce pressure from investors.
The story has already changed the perception of the Sun-Trump alliance. The question is whether this conflict will become an isolated case or a signal for the entire industry.
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