Donald Trump’s Bitcoin empire is reported to be collapsing.
There is a somewhat complicated story about Trump grabbing the money and not letting others have money.
Several people were surprised. Some had put faith in blockchain. Others had put faith in Donald Trump.
Neither seemed much defense against someone who wanted to take the money.
Crypto billionaire Justin Sun and his companies have sued World Liberty Financial, a crypto venture co-founded by President Donald Trump, accusing it of extortion and an “illegal scheme” to seize his tokens.
In a complaint filed in San Francisco federal court, Sun claimed that “World Liberty is on the verge of collapse” and questioned whether it holds enough reserves to back its USD1 stablecoin.
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The complaint raises concerns about World Liberty’s financial health, again stating the company “is on the verge of collapse” and noting it recently took out a loan using WLFI tokens as collateral, though the company says it has enough capital to avoid default.
The 52-page filing in the U.S. District Court for the Northern District of California further alleges that WLF planned to pay “most of the token sale proceeds — up to 95% — to company insiders.”
At the center of the lawsuit is an allegation about a covert change to WLF’s blockchain infrastructure.
According to the complaint, World Liberty modified the smart contract governing $WLFI in August 2025 to add a “blacklisting” function that allowed it to freeze tokens in specific wallets. Sun alleges the change was not put to a governance vote or disclosed to investors, even as token holders had just approved making part of the supply tradable.