Sun Bought 3 Billion WLFI Tokens for $45 Million Before His Holdings Were Frozen
Key Facts
Justin Sun and his companies Black Anthem Limited and Blue Anthem Limited filed their lawsuit against World Liberty Financial on April 21, 2026, according to the federal court docket. Sun is seeking to unfreeze his tokens and prevent the project from seizing, destroying or restricting his holdings, Reuters reported. The case centers on what Sun says was a freeze of his WLFI tokens and a denial of rights associated with them. It also addresses the limits of the project’s authority to control governance tokens held by investors. A new lawsuit filed on November 3 could not be verified; the docket and reliable coverage establish the original lawsuit’s date as April.
The lawsuit distinguishes between what Sun bought and what he received later: it says he paid $45 million for 3 billion WLFI tokens, then was granted an additional 1 billion tokens after being named an adviser to the project, Reuters reported. The stated purchase price therefore does not represent the cost of all 4 billion tokens. This detail gives the dispute a dimension beyond the value of the initial investment, as the holdings also include tokens granted in connection with Sun’s relationship with the project. Sun says the freeze restricted his ability to dispose of them. He also asked the court to prevent the company from seizing or destroying them or imposing further restrictions on them.
The lawsuit says World Liberty changed the smart contract governing the WLFI token in August 2025, adding a “blacklist” function that allows tokens in specific wallets to be frozen, according to a CoinDesk report. This is a description of Sun’s allegation in the lawsuit, not a court ruling on the contract’s function or how it was used. According to Reuters, Sun said the freeze prevented him from voting on governance proposals. He added that the project threatened to permanently burn the tokens, meaning remove them from circulation, according to his account. That puts voting rights and the tokens’ fate at the center of the legal dispute.
Developments in the dispute were not limited to the federal lawsuit in California. On May 4, 2026, World Liberty said it had filed a separate defamation lawsuit against Sun in Florida state court, accusing him of waging a public smear campaign, Reuters reported. In its lawsuit, the company said Sun transferred some WLFI tokens that carry voting and governance rights to Binance, and also alleged that he bet on the token’s decline through short selling. These are allegations made by the company in its defamation lawsuit, not judicial findings. Sun responded that the announced lawsuit was a “baseless media stunt,” and said he stood by his actions and looked forward to winning the case in court.
The two sides also differ over the basis for the freeze and the handling of the tokens. Sun denied in his lawsuit that he short-sold WLFI, while World Liberty said its authority to freeze tokens was disclosed in the terms of sale, according to Reuters. This disagreement reflects a central question in the case: whether the terms of sale give the project authority to freeze tokens, and what effect that has on a holder’s rights, including the right to vote on governance proposals. The company did not comment on the federal lawsuit when Reuters published its report on April 21. The terms of sale position, as the agency reported it from the company, remains part of its account of the dispute.
In a later procedural development, the case docket showed that on September 29, 2026, the judge ordered the case stayed until October 22 for jurisdictional discovery. The docket available here does not establish what happened after the stay ended, so the next step in the federal lawsuit cannot be determined from these facts. Earlier, the court docket said World Liberty Financial identified its parent company as WLF Holdco LLC in a disclosure dated June 2. In the token market, WLFI rose about 12% over 24 hours after the defamation lawsuit was announced in May, but remained down about 72% since trading began on September 1, according to a Reuters report published at the time. The report valued Sun’s 4 billion-token holding at about $264 million when it was published; that value is tied to that date and is not a current estimate.