- Citing independent researchers, Tron founder Justin Sun claimed World Liberty can unilaterally move USD1 from frozen addresses to admin-controlled wallets.
Tron (TRX) founder Justin Sun’s lawsuit against World Liberty Financial (WLFI) recently gained momentum after the court approved his motion to keep the case public, blocking a move to private arbitration.
Emboldened by the ruling, Sun disclosed further details about his interactions with the Trump‑family‑backed DeFi platform. He argued that, beyond undermining core blockchain and DeFi principles, WLFI has tampered with the smart contract governing its native stablecoin, USD1.
USD1 Allegedly Rigged by World Liberty
Referring to research by independent analysts, notably crypto commentator Ni Sen (known as Phyrex), Sun asserted that World Liberty’s administrative control over USD1 extends beyond the usual abilities to freeze, unfreeze, pause, mint, and burn tokens. He said the contract contains a backdoor enabling the platform to siphon USD1 from frozen addresses and transfer it to wallets under its administration.
Sun emphasized that World Liberty not only hid this critical function from token holders but also acted contrary to the decentralized, transparent ethos of blockchain and cryptocurrencies. He remarked that the “Liberty” in the company’s name is ironic given its stringent controls and manipulative practices toward holders.
“In this sector, ‘your assets’ must truly belong to you—encoded in law and now reinforced by precedent,” Sun stated.
He added that his legal battle with World Liberty is not merely an attempt to recover funds; it seeks to establish a jurisprudential standard that safeguards the fundamental purpose of blockchain and cryptocurrency.
USD1 is a stablecoin pegged one‑to‑one with the U.S. dollar, fully backed by World Liberty’s reserves, which include U.S. government Treasuries, dollar deposits, and other cash equivalents. On‑chain data shows the token’s market capitalization at approximately $3.98 billion.
The Sun versus World Liberty Lawsuit
Sun invested $45 million in World Liberty, receiving four billion tokens in return. The arrangement granted token holders voting rights on protocol upgrades and governance decisions.
Later, World Liberty froze Sun’s tokens after alleging he violated the agreement by attempting to shift his holdings to Binance to circumvent restrictions.
The dispute has spawned reciprocal lawsuits: Sun’s claim against the platform and a defamation countersuit filed by World Liberty, seeking damages, reimbursement of legal fees, and retractions of Sun’s statements.
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