In brief
Justin Sun, founder of the TRON cryptocurrency, has filed a lawsuit against World Liberty, a crypto firm co-founded by Donald Trump and Eric Trump. Sun alleges that the company has unlawfully frozen his WLFI tokens, stripped him of governance rights, and threatened to destroy his tokens. The lawsuit comes amid declining token values and concerns about the firm's management practices. The company denies any wrongdoing, while Sun criticizes certain individuals associated with the venture for exploiting the Trump brand.
The Trump family's World Liberty crypto venture is being sued by one of its billionaire backers over allegations of extortion.
Justin Sun has accused World Liberty of an illegal scheme to seize his WLFI tokens, a cryptocurrency issued by the company.
Sun alleges the firm, co-founded by US President Donald Trump and his son Eric Trump, has frozen all of his tokens and stripped him of his right to vote on governance issues.
The BBC has contacted Trump and World Liberty for comment.
Sun is an ardent supporter of Trump and his stance on cryptocurrencies but accused certain individuals associated with World Liberty of acting against the president's values.
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 by 'burning' them - all without any proper justification, he said in a social media post announcing the lawsuit.
Sun, founder of a separate multi-billion dollar crypto project, TRON, initially invested $45m (£33m) in World Liberty and claimed that his WLFI tokens were valued at over $1bn (£740m) at times.
Since September, however, the price of a single WLFI token has plummeted from 31 cents to just under 8 cents.
Despite his backing, Sun alleged that those managing World Liberty, including co-founder Chase Herro, are exploiting the Trump brand to profit through fraud.
In his complaint, filed on Tuesday in a San Francisco federal court, Sun argues that initial promises to give token-holders the option to trade their currency were false and misleading.
While the broader market for tokens has opened, Sun claims that World Liberty has prevented him from trading any tokens, threatening to burn his entirely.
WLFI has denied wrongdoing and accused Sun of making baseless allegations to hide his own misconduct.
Investors express growing concern over World Liberty's borrowing against its token value.
Interestingly, the Securities and Exchange Commission dropped its investigation into Sun, prompting questions from Senator Elizabeth Warren about the timing in relation to his investments in Trump's ventures.
Meanwhile, other Trump-related businesses are facing challenges, including the replacement of Truth Social's CEO after a significant drop in its share price.
