World Liberty Financial, the crypto venture co-founded by Donald Trump and his sons, has filed a defamation lawsuit in Florida state court against Hong Kong-based crypto entrepreneur Justin Sun, escalating a dispute between the project and one of its most prominent backers. The lawsuit, announced on Monday, accuses Sun of launching a “public smear campaign” aimed at damaging the company’s reputation.
Allegations of Market Manipulation
The lawsuit alleges that Sun improperly transferred some of his WLFI tokens—which carry voting and governance rights—to the crypto exchange Binance. It also claims that Sun placed bets that WLFI would decline in market value, a practice known as short selling. According to the suit, these actions were part of a coordinated effort to push the token’s market price down as public trading began in September.
“Justin Sun engaged in a defamatory campaign to torch World Liberty Financial’s reputation. He knew his claims were false and made them anyway to harm WLFI token holders,” said Zach Witkoff, World Liberty’s CEO, in a separate post on X.
Sun’s Response
Justin Sun dismissed the lawsuit as a “meritless PR stunt” in a statement to Reuters, adding, “I stand by my actions and look forward to defeating the case in court.” He also posted the same message on X.
The legal action comes after Sun sued World Liberty in April, alleging that the company had illegally frozen tokens he purchased. Sun claimed World Liberty secretly installed tools to prevent the sale of his tokens after they became tradable in September 2025. In that lawsuit, Sun denied shorting WLFI’s token.
Market Impact and Financial Stakes
World Liberty’s token rallied after news of the lawsuit, gaining about 12% over the last 24 hours. However, it remains down approximately 72% since trading began on 1 September. Sun’s stake of 4 billion tokens in World Liberty is currently worth around $264 million.
The war of words and lawsuits between World Liberty and Sun, a high-profile crypto billionaire, marks a sharp reversal of a previously rosy relationship. Sun’s early backing of World Liberty in late 2024 and early 2025—when he bought $45 million worth of its tokens and was named an adviser—was critical to launching the project, according to Reuters.
Trump Family’s Crypto Ventures
World Liberty is the most prominent of several lucrative crypto businesses co-founded or controlled by the Trump family, which has already made more than $1 billion from the venture, according to a Reuters analysis. World Liberty’s bylaws state that 75% of the revenue from WLFI token sales is routed to the Trumps.
