Justin Sun has filed a lawsuit in a California federal court against World Liberty Financial, alleging wrongful freezing of his $WLFI tokens and removal of his governance rights within the project.
The legal action centres on claims that the platform restricted access to his holdings, blocked participation in governance voting, and threatened to permanently destroy the tokens through a burn mechanism. Sun said the measures were taken without justification and after failed attempts to resolve the issue privately.
After the filling report was released this morning, data shows that the token has declined and is now trading around $0.079. As of April 22, 2026, World Liberty Financial (WLFI) is hovering between $0.078 and $0.080, reflecting mild short-term volatility. Daily price movement remains mixed, with some data showing slight gains and others small losses. Trading activity is still strong, with 24-hour volume sitting between $53 million and $55 million, while the market cap is around $2.5 billion. Despite this activity, the token remains significantly below its all-time high of around $0.33–$0.34, with recent performance showing continued downward pressure, including a drop of over 15% in the past month.
Today, I filed a lawsuit in California federal court against World Liberty Financial to protect my legal rights as a holder of $WLFI tokens.
I have always been—and remain—an ardent supporter of President Trump and his Administration’s efforts to make America crypto friendly.…
— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) April 22, 2026
Token freeze and governance restrictions spark legal action
According to the filing, Sun contends that the project’s activities violate the anticipated rights of the token owners, specifically regarding their role in the governance process.
He explained that he was not able to participate in any governance vote due to being suddenly blocked from accessing his tokens, adding that the project team has already informed him about the likelihood of burning tokens that would render his investments worthless.
It is clear that the crypto industry faces increasing pressure on the issue of governance practices in the face of centralized decision-making.
Also Read: Binance Co-Founder Changpeng Zhao Issues New Warning About Scammers Using Fake Accounts
Governance proposal adds to dispute over investor rights
This case also brings attention to another recent proposal that was introduced by World Liberty Financial on April 15. According to the proposal, token holders will have to explicitly agree to the new rules or be subject to having their tokens locked for an unspecified period of time.
In addition, there will be certain mechanisms of burning part of the tokens of advisors as well as placing vesting on early token buyers with a lockup period of two years, followed by slow releases. Sun expressed his disagreement with the proposal, but he cannot cast his vote because of the token freeze.
Meanwhile, the founder of TRON locked 5.2 million World Liberty Financial (WLFI) governance tokens, valued at approximately $78 million, to bolster the protocol’s liquidity and decentralization efforts.
World Liberty countersued Sun
In May, World Liberty filed a defamation lawsuit against Sun in Florida state court, accusing him of running a public campaign against the project. The company also alleged that Sun improperly transferred some WLFI tokens carrying governance rights to Binance and took positions that would benefit from a decline in WLFI’s price.
Sun rejected the allegations and described the countersuit as a “PR stunt,” saying he stood by his actions.
Sun’s case moves forward in public court
There was an August 20 hearing over World Liberty’s attempt to push the dispute into arbitration. Sun said after the hearing that Judge James Donato had kept all of his individual claims in open federal court and rejected World Liberty’s effort to move the entire dispute into private arbitration. The judge also directed the parties to determine which claims brought by Sun-controlled companies should remain in court and which could be subject to arbitration.
World Liberty disputed Sun’s description of the hearing. Co-founder and CEO Zach Witkoff said the court had not issued the sweeping rulings Sun claimed and argued that several claims brought by Sun’s companies should go to arbitration.
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