Justin Sun sues World Liberty Financial over alleged smart contract backdoor

TRON founder Justin Sun has filed a lawsuit against World Liberty Financial (WLF), alleging the company embedded a ‘backdoor’ into its $WLFI smart contract. Sun claims this mechanism grants WLF unilateral power to freeze, restrict, or burn tokens without notice or due process.

Sun, one of WLF’s early investors who contributed $45 million, alleges that WLF used these capabilities against his own tokens, describing the action as an unlawful seizure of property. He further warned that the USD1 stablecoin contains administrative controls that could allow WLF to freeze or destroy tokens.

In a recent California federal court appearance, Sun’s legal team successfully argued against moving the dispute into private arbitration and sealing documents, insisting the case remain in open court. While the judge has requested discussions regarding which specific claims should proceed through arbitration, Sun characterized the refusal to move to private arbitration as a significant win. Sun also noted he obtained a court order to prevent WLF from destroying or reallocating his WLFI tokens.