Key Takeaways
- A defamation complaint has been lodged in Florida by World Liberty Financial targeting Justin Sun
- Allegations include Sun engaging in short-selling activities and moving WLFI tokens to Binance to manipulate prices downward
- In April, Sun initiated his own legal action against World Liberty, alleging improper token freezing
- Following the lawsuit announcement, WLFI token prices surged 12%, though remain 72% below initial trading levels
- The Trump family has reportedly earned upwards of $1 billion through World Liberty, receiving 75% of token proceeds
The cryptocurrency platform World Liberty Financial, which counts Donald Trump and his family members among its co-founders, has initiated defamation proceedings against Justin Sun, previously among its most prominent early investors.
Court documents were submitted to Florida’s state judicial system on May 4. The complaint accuses Sun of orchestrating a coordinated “public smear campaign” designed to tarnish the project’s standing.
World Liberty contends that Sun moved WLFI tokens carrying governance privileges to the Binance cryptocurrency platform. Additionally, the filing asserts he executed short-sale transactions betting against the token’s value coinciding with its September 2025 public market debut.
Sun has rejected these accusations outright. In his response, he characterized the legal action as “a meritless PR stunt” and expressed confidence in mounting a courtroom defense.
This marks the second litigation confrontation between these parties. Sun previously filed suit against World Liberty in federal court in San Francisco during April. His complaint alleged unlawful freezing of his token holdings, removal of his governance participation rights, and threats to completely destroy them.
World Liberty countered by pointing to disclosures in the Terms of Sale regarding token freezing capabilities. The company accused Sun of improper conduct and dismissed his legal filing as “a desperate attempt to deflect attention.”
Partnership Turned Rivalry
Sun initially stood as a prominent champion of the initiative. Between late 2024 and early 2025, he committed $45 million to World Liberty and received an advisory position. He subsequently purchased $100 million worth of Trump’s meme coins in July 2025.
Eric Trump previously praised Sun as “a great friend and an icon in the crypto space.” When WLFI launched trading on September 1, 2025, Sun publicly declared his belief it would become “one of the biggest and most important projects in crypto.”
That alliance has now completely deteriorated.
Market Performance and Financial Implications
Sun’s holdings include 4 billion WLFI tokens, presently valued at approximately $264 million. Since trading commenced, the token has plummeted from 31 cents to below 8 cents, representing approximately a 72% decline.
A temporary price increase of roughly 12% occurred after Monday’s lawsuit became public.
Revenue Distribution
According to World Liberty’s governing documents, 75% of proceeds from WLFI token transactions flow to the Trump family. An investigation by Reuters determined the family has already generated over $1 billion from this enterprise.
In his legal filing, Sun claimed that specific individuals operating World Liberty are exploiting the Trump name “to profit through fraud.” World Liberty categorically rejects all allegations of misconduct.
The Securities and Exchange Commission previously conducted an investigation into Sun regarding claims he compensated influencers to promote his businesses without proper disclosure. Following the investigation’s closure, Senator Elizabeth Warren raised questions about potential connections to Sun’s financial involvement in Trump’s cryptocurrency projects.
