May 06, 2026
By Shubhii Verma
World Liberty Financial (WLFI), a cryptocurrency project co-founded by former US President Donald Trump’s sons, has filed a defamation lawsuit against Hong Kong-based crypto entrepreneur Justin Sun. The case was filed in a Florida state court and marks a major escalation in an ongoing dispute between the company and one of its early and most visible supporters.
In the lawsuit, World Liberty accuses Sun of running a “public smear campaign” to damage the company’s reputation. The company claims that Sun wrongly transferred some of his WLFI tokens — which include voting and governance rights — to the crypto exchange Binance. It also alleges that Sun placed bets that the value of WLFI would fall once the token started public trading in September. This practice, known as short selling, would have allowed him to profit if the token’s price dropped.
Zach Witkoff, CEO of World Liberty, said Sun knowingly made false statements to harm the company and its token holders. He stated on social media that Sun’s actions were meant to push the token’s market price down during a sensitive period for the project.
Sun has strongly denied the allegations. In a statement to Reuters and on social media, he called the lawsuit a “meritless PR stunt” and said he looks forward to fighting the case in court. He maintains that he has done nothing wrong.
This legal battle follows an earlier lawsuit filed by Sun in April. In that case, Sun accused World Liberty of illegally freezing the tokens he had purchased. He claimed the company secretly used tools to stop him from selling his tokens after they became tradable in September 2025. World Liberty responded by saying that its ability to freeze tokens was clearly mentioned in the original terms and conditions of the sale.
Despite the controversy, WLFI’s token price rose about 12% in the 24 hours after news of the lawsuit broke. However, the token is still down around 72% from its value when it first began trading on September 1. Sun currently holds 4 billion WLFI tokens, valued at roughly $264 million.
The conflict is surprising because Sun was once a key supporter of World Liberty. In late 2024 and early 2025, he invested $45 million into the project and even served as an adviser, helping the venture gain early momentum.
World Liberty is one of several crypto businesses linked to the Trump family. According to Reuters, the family has already earned over $1 billion from the project, with 75% of revenue from token sales reportedly going to them under the company’s bylaws.
