Contents
Key Takeaways
- A Florida court received a defamation complaint from World Liberty Financial targeting Justin Sun
- The lawsuit alleges Sun engaged in short-selling WLFI tokens and moved them to Binance to manipulate prices downward
- This follows Sun’s own legal action in April, where he accused World Liberty of unlawfully freezing his token holdings
- Following the lawsuit announcement, WLFI token prices jumped 12%, though they remain 72% below initial trading levels
- Revenue distribution shows the Trump family receiving over $1 billion from World Liberty, representing 75% of token proceeds
The cryptocurrency project World Liberty Financial, launched by Donald Trump alongside his sons, has initiated defamation proceedings against Justin Sun, who previously ranked among its most substantial early investors.
Filed on May 4 in a Florida state courthouse, the legal action accuses Sun of orchestrating a “public smear campaign” designed to undermine the project’s credibility and market standing.
World Liberty contends that Sun moved WLFI tokens carrying governance privileges to the cryptocurrency platform Binance. The complaint further asserts he executed short positions against the token, effectively betting on price declines, precisely when public market trading commenced in September 2025.
Sun has rejected these accusations outright. Characterizing the legal filing as “a meritless PR stunt,” he expressed confidence in defending himself through the judicial process.
The current litigation marks the second courtroom confrontation between these parties. Sun initiated proceedings against World Liberty in April through a San Francisco federal court. His complaint alleged the company improperly froze his token assets, removed his governance participation rights, and made threats to completely “burn” his holdings.
In its defense, World Liberty maintained that token freezing capabilities were properly disclosed within the Terms of Sale documentation. The company countered with accusations of Sun’s misconduct, characterizing his legal challenge as “a desperate attempt to deflect attention.”
The Transformation from Strategic Partner to Legal Opponent
Sun initially occupied a position as a prominent project supporter. His financial commitment totaled $45 million to World Liberty during the final months of 2024 and opening weeks of 2025, earning him an advisory position. Additionally, he acquired $100 million worth of Trump’s meme coins in July 2025.
Eric Trump previously characterized Sun as “a great friend and an icon in the crypto space.” When WLFI trading launched on September 1, 2025, Sun publicly declared his conviction that it would become “one of the biggest and most important projects in crypto.”
That collaborative relationship has now completely deteriorated.
Market Performance and Investment Values
Sun’s portfolio includes 4 billion WLFI tokens, presently valued at approximately $264 million. Since trading inception, the token has plummeted from 31 cents to below 8 cents, representing a decline of roughly 72%.
Following Monday’s lawsuit disclosure, the token experienced a temporary surge of about 12%.
Revenue Distribution Structure
According to World Liberty’s governing bylaws, the Trump family receives 75% of all revenue generated through WLFI token transactions. Reuters’ investigative analysis determined the family has accumulated over $1 billion from this enterprise.
In his legal filing, Sun claimed that specific individuals managing World Liberty are exploiting the Trump brand “to profit through fraud.” World Liberty categorically rejects all such allegations.
The Securities and Exchange Commission previously conducted an investigation into Sun regarding claims he compensated influencers for promoting his business ventures without proper disclosure. Following the investigation’s termination, Senator Elizabeth Warren raised questions about potential connections to Sun’s financial involvement with Trump’s cryptocurrency projects.
