Justin Sun Faces Lawsuits After 190M Trump Crypto Bet and Heavy Losses

• Justin Sun lost $190M on Trump crypto bets, including $71M on $TRUMP and $75M on WLFI, now frozen at $ 42 M.
• WLFI used a hidden blacklist via a single EOA and a 3-of-5 multisig to freeze Sun’s tokens after transfers.
• WLFI responded, “See you in court, pal,” after a public feud escalated over the loan and token issues.

Tron founder Justin Sun invested $190 million in crypto projects linked to the Trump family to gain proximity to them. He lost $71 million on $TRUMP memecoin to attend an exclusive gala. He also invested $75 million in World Liberty Financial (WLFI), which is now worth $42 million, had his wallet frozen, and now faces court threats from the project.

Justin Sun Loses $190M 

According to sources, Tron founder Justin Sun invested $190M in two Trump-associated assets to build close ties with the Trump family. He acquired large amounts of $TRUMP memecoin, realizing an estimated $71M loss after buying high and selling low, but he still earned enough points for an exclusive gala dinner.

Source: X

Sun also pledged and invested $75M into World Liberty Financial (WLFI), the Trump family-backed DeFi project. He became one of its largest known backers and an advisor holding about 545M tokens. 

WLFI Wallet Freeze Sparks Blacklisting Allegations

The core issue stems from WLFI’s smart contract design. In September 2025, Justin Sun transferred about $9 million worth of WLFI tokens, which he described as test deposits or routine transactions. WLFI then blacklisted his wallet, which Sun later alleged was done using a hidden “trap door” or undisclosed blacklisting function in the smart contract.

Sun revealed on X that a single anonymous EOA and a 3-of-5 multisig setup allow the team to blacklist and freeze any investor’s tokens unilaterally without notice or appeal. This resulted in his wallet being frozen, preventing him from selling, transferring, or hedging his WLFI tokens. 

According to sources, the WLFI token has since declined sharply. Sun’s frozen holdings, initially valued over $100 million at peak, have dropped to $42M. WLFI defended the freeze as a response to “malicious or high-risk activity” that could harm the community, while denying any secret backdoor.

What’s Next as the Feud Escalates into Legal Threats?

As of April 16, 2026, no formal lawsuit has been filed, but WLFI has signaled it is prepared for legal action, including statements such as “We have the truth. See you in court, pal,” citing evidence of Sun’s alleged misconduct. Sun has reserved all his legal rights and is reportedly demanding disclosure of the anonymous project’s controllers and the release of his frozen WLFI stake.

Therefore, a lawsuit in U.S. courts could emerge soon, focusing on undisclosed smart contract powers, property rights, and governance legitimacy. Vote results, potential token unlocks or burns, and any forced transparency through discovery could shape market sentiment for WLFI, now trading at $0.08158 amid ongoing uncertainty. The situation remains fluid with high stakes for all parties.

Furthermore, the situation could increase regulatory scrutiny from agencies such as the SEC and CFTC on similar projects, while also warning retail investors to demand clear proof of decentralization. As more politically linked crypto projects emerge, risks related to counterparties, governance, and smart contract design may become central to investor due diligence.

Related: Trump Memecoin Team Plans Second Gala as Token Hits Lows