Trump's crypto company sued by major investor: Shocking details behind Justin Sun's lawsuit

One of World Liberty's most high-profile backers has turned on the Trump family's crypto venture, and he is not going quietly.

Justin Sun, the billionaire founder of the TRON blockchain, has filed a lawsuit against World Liberty Financial in a San Francisco federal court, accusing the company of running an "illegal scheme" to effectively steal his cryptocurrency tokens.

Sun initially put $45 million into the project. At its peak, his stake was worth over a billion dollars. Now he says the company has frozen all of his tokens, taken away his right to vote on governance matters, and is threatening to permanently delete or "burn" everything he owns in the project.

Sun announced the lawsuit on social media, making clear he still supports Trump himself but believes people running World Liberty have gone rogue.

"They wrongfully froze all of my tokens, stripped me of my right to vote on governance proposals, and have threatened to permanently destroy my tokens," he wrote.

He accused co-founder Chase Herro and others of using the Trump brand as a "golden opportunity to profit through fraud."

World Liberty has fired back, calling Sun's allegations baseless and accusing him of "playing the victim" to cover up his own misconduct. The company has not elaborated on what that misconduct allegedly involves.

So how did it get to this point?

Sun was one of World Liberty's most enthusiastic early supporters. He poured $45 million into the project, bought $100 million worth of Trump's meme coins last July, and positioned himself as one of the crypto world's biggest Trump allies.

But the investment has not gone well. WLFI tokens have crashed from 31 cents each in September to just under 8 cents today. While other token holders were eventually allowed to trade their holdings, Sun says he has been completely locked out and cannot sell a single one.

He also claims the original promise that tokens would eventually become tradeable was "false and misleading" from the start.

There is another layer to this story worth paying attention to. Sun had previously been under investigation by the Securities and Exchange Commission over allegations that he paid celebrities and influencers to promote his companies without disclosing those payments.

That investigation was quietly dropped. 

Senator Elizabeth Warren has publicly questioned whether the decision to drop it had anything to do with Sun's multi-million dollar investments in Trump's crypto ventures.