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, proving that even in the wild west of digital assets, feelings can still get hurt.
The lawsuit, posted on X, accuses Sun of launching a “public smear campaign.” Specifically, World Liberty alleges that Sun improperly transferred some of his WLFI tokens - which come with voting and governance rights - to crypto exchange Binance, and placed bets that WLFI would decline in value (a practice known as short selling). According to the lawsuit, this was part of a coordinated effort to tank the token’s price 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,” Zach Witkoff, World Liberty’s CEO, wrote in a separate X post.
Sun, never one to let a good PR stunt go unanswered, told Reuters: “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.” He posted the same message on X, presumably to ensure maximum irony.
This legal volley is but the latest in a rapidly escalating feud. In April, Sun sued World Liberty, claiming the company had illegally frozen the tokens he had bought. Sun alleged that World Liberty secretly installed tools to prevent him from selling his tokens after they became tradable in September 2025. In that lawsuit, Sun denied shorting WLFI’s token.
World Liberty’s response in Monday’s filing? The ability to freeze tokens was disclosed in the terms of sale - because nothing says “transparency” like burying a token-freeze clause in the fine print.
Perhaps the only winner here is WLFI’s token price, which rallied about 12% over the last 24 hours following news of the lawsuit. Still, it remains down approximately 72% since trading began on 1 September. Sun’s stake of 4 billion tokens is currently worth around $264 million - a significant haul, but a far cry from the project’s early promise.
The war of words and lawsuits marks a sharp reversal from what was once a rosy relationship. Sun’s early backing of World Liberty in late 2024 and early 2025 - when he bought $45 million worth of tokens and was named an adviser - was critical to getting the project off the ground, according to Reuters.
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 World Liberty, according to a Reuters analysis. The venture’s bylaws state that 75% of revenue from WLFI token sales is routed to the Trumps. Because when you’re building a decentralized financial future, nothing says “for the people” like a 75% family cut.