World Liberty Financial, the crypto project co-founded by President Trump and his family, filed a defamation lawsuit against Tron founder Justin Sun on May 4 in Miami-Dade County, Florida, alleging a “coordinated media smear campaign” after Sun sued the project for fraud in April.
Summary
- World Liberty Financial alleges Sun conducted straw purchases of WLFI tokens to conceal his identity, engaged in short selling of the token, and made false statements on social media after his tokens were frozen in violation of his terms of sale.
- Sun fired back immediately, calling the suit “a meritless PR stunt” and saying he stands by his actions, while WLFI CEO Zach Witkoff said he looks forward to “the truth coming out in court.”
- The WLFI token rose approximately 12% on the day of the filing, though the token is still down roughly 85% since its September 2025 launch.
World Liberty Financial sued Justin Sun for defamation in Florida state court on May 4, one day after Consensus 2026 opened in Miami. The filing came in direct response to Sun’s April 21 federal lawsuit in California, in which he accused WLFI of embedding a secret “backdoor blacklisting function” in its smart contract that allowed the project to freeze, restrict, and effectively confiscate investor tokens.
As crypto.news reported, Sun said the project froze all of his tokens, removed his voting rights, and threatened to burn his holdings without cause, and that he had $75 million invested in WLFI since 2024. In Monday’s countersuit, World Liberty alleged that Sun made “straw purchases” by acquiring WLFI tokens on behalf of undisclosed third parties, may have engaged in short selling of the token, and then launched a false public narrative to cover the conduct. “Sun has launched a coordinated media smear campaign against World Liberty Financial and refused to stop even when confronted with the truth,” the project said in a statement on X.
Fortune reported that Sun had written on X: “Every action taken by the WLFI team to secretly implant backdoor controls over user assets, to freeze investor funds without disclosure or due process, and to treat the crypto community as a personal ATM, someone must be held personally accountable for these actions.” WLFI’s suit called those statements false or defamatory and said Sun was “well aware” that the project had the right to freeze his tokens under its terms of sale. Sun responded the same day: “The alleged defamation lawsuit that World Liberty announced on X today is nothing more than a meritless PR stunt. I stand by my actions and look forward to defeating the case in court.”
As crypto.news documented, the dispute escalated in April when Sun accused WLFI of hiding blacklist controls while the project simultaneously faced scrutiny over its use of self-issued tokens as loan collateral and a near-93% utilisation rate in its USDC pool. As crypto.news tracked, Sun’s frozen WLFI wallet had already lost approximately $60 million in value before the lawsuits were filed, tracking the token’s broader 85% decline from its September 2025 highs. Neither lawsuit has reached trial, and no allegations have been proven in court.
