- Justin Sun sues World Liberty Financial over frozen WLFI tokens and lost governance rights.
- April 15 proposal may lock tokens indefinitely if holders reject new terms and burning rules.
- Dispute centers on blacklisting claims as WLFI defends the freeze as a routine security measure.
Justin Sun has filed a lawsuit in a California federal court against World Liberty Financial, alleging that the crypto venture wrongfully froze his WLFI token holdings, removed his governance rights, and threatened to permanently destroy his assets. In a public statement, Sun said the legal action aims to restore his rights as a token holder after what he described as unsuccessful attempts to resolve the dispute directly with the project’s team.
According to Sun, the project froze his tokens without justification, preventing him from participating in governance decisions tied to the WLFI network. He said the move stripped him of voting rights and raised concerns about proposed changes that could impact token ownership and control.
Sun added that a governance proposal published on April 15 includes provisions requiring token holders to affirmatively accept new terms. Those who do not accept would face indefinite token lockups. The proposal also introduces a requirement that 10% of advisor tokens be permanently burned and imposes a two-year cliff followed by a two-year vesting schedule for early purchasers.
Background on Investment and Blacklisting Claims
Sun initially invested $30 million in WLFI in late 2024 and later increased the holdings to approximately $75 million. He was also named an advisor to the project. At one point, his wallet reportedly held 540 million unlocked WLFI tokens and 2.4 billion locked tokens.
In September, Sun confirmed that his wallet had been blacklisted following on-chain activity that included outgoing transfers, one valued at $9 million. The project has argued that the freeze was a routine security measure rather than a targeted action.
Sun has also alleged that the project embedded a “backdoor blacklisting function” within its token contracts, which he claims allows unilateral control over user holdings. However, these claims have not been independently verified.
Related: WLFI Targets 62B Tokens in Lockup Plan, Faces Justin Sun Criticism
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Source: https://coinedition.com/justin-sun-sues-world-liberty-financial-over-frozen-tokens/