Trump Family's Crypto Project Sued for 'Criminal Extortion' by $45M Investor

April 22, 2026

The Trump family's cryptocurrency venture, World Liberty Financial, is facing a federal lawsuit from one of its biggest investors, who accuses the project of fraud, breach of contract, and what his lawyers call "criminal extortion."

Justin Sun, the billionaire founder of the Tron blockchain, filed the suit on April 21 in U.S. District Court for the Northern District of California. Sun invested $45 million in WLFI tokens between November 2024 and January 2025, and received an additional one billion tokens as a formal advisor to the project. That investment is now at the center of a legal war with the president's own family business.

Sun alleges that World Liberty Financial secretly embedded a blacklisting function inside its smart contract code without disclosing it to investors. When the relationship soured, the company used that hidden function to freeze Sun's tokens twice, stripped his governance voting rights, and threatened to permanently burn his entire holdings.

That wasn't the end of it. According to the lawsuit, WLFI executives then tried to leverage the frozen tokens as coercion: they demanded Sun mint $200 million worth of the project's USD1 stablecoin and promote it across his Tron network. Company executive Chase Herro allegedly went further, threatening to report Sun to U.S. federal authorities over a separate matter if he pursued legal action.

Sun's lawyers describe Herro's threat as "a pressure tactic that itself qualifies as criminal extortion."

The complaint also raises alarm about World Liberty Financial's solvency. Sun claims the project is "on the verge of collapse" and questions whether it holds sufficient reserves to back USD1's dollar peg at all. The project had publicly promoted USD1 as a reliable stablecoin, but Sun alleges those representations were among the fraudulent claims that induced him to invest in the first place.

World Liberty Financial was co-founded by Trump's associates and family connections, including Zach Witkoff, son of Steve Witkoff, Trump's appointed Middle East special envoy. Zach Witkoff responded to the lawsuit on social media, calling it "a desperate attempt to deflect attention from Sun's own misconduct" and claiming the company acted to "protect itself and its users." He offered no response to the specific extortion allegations.

The lawsuit represents an extraordinary fracture within Trump's crypto inner circle. Sun was not a passive investor. He was a formal advisor, a $45 million backer, and a public booster of the administration's push to make the United States "crypto-friendly." That a man who poured $45 million into the president's family business is now accusing that same business of threatening him, freezing his assets, and demanding hundreds of millions more under duress tells you everything about how the Trump commercial empire treats its partners.

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