Tron founder Justin Sun, announced that he is suing Trump-family-backed World Liberty Financial, alleging that they froze his tokens and threatened to burn it without any justification.
Deep concerns over token control for Sun
Justin Sun took to X to post about his recent experience with WLFI, and stated that he had filed a lawsuit in the California federal court against them to protect his rights to hold his $WLFI tokens.
Sun claimed that his WLFI tokens were frozen without justification, taking away both his liquidity and voting power. He also mentioned that he tried his methods to resolve this situation without initiating a lawsuit.
“But the project team has refused my requests to unfreeze my tokens and restore my rights as a token holder. They have left me with no choice but to turn to the courts,” he added.
But beyond the immediate legal argument, the situation raises a concern over how decentralized governance systems could be when a small number of actors can effectively override participants’ power.
According to media, Sun is the largest individual investor in WLFI, and hence this case calls closer attention to the previous controversy circling around WLFI over the ‘$75M borrowing strategy on Dolomite.’
What’s the governance proposal that Sun talks about?
Earlier this month, Sun threatened legal action, citing concerns over the ‘protracted’ lockup periods for WLFI’s governance token. Adding on, Sun criticized WLFI’s recent governance proposal for its lack of transparency, pointing out that over 76% of the voting tokens originated from just 10 wallets.
WLFI reacted to it by calling them “baseless allegations” and saying that they have proof.
Despite taking legal action, he has gone out of his way to separate the dispute from his support for Trump, suggesting the issue lies with individuals within the project rather than its broader political alignment.
A point made on the post, specifically brings attention to the new governance proposal by World Liberty which prevents early investors from trading 80% of their holdings for a period of almost four years after which tokens wouldn’t unlock all at once. Instead, they’d be released gradually over another two years as per reports.
“I also want the community to know that I strongly oppose the new governance proposal World Liberty published on April 15,” he wrote.
He, in fact, said that if the packaging were stripped away, then what would remain is one of the ‘most absurd governance scams’ that he had experienced.
