World Liberty Sues Justin Sun Over WLFI Dispute

Defamation Claims Follow Token-Freeze Fight

World Liberty says Sun funded “a large, deliberate, short-selling campaign designed to suppress $WLFI’s price” when WLFI began public trading in September. The company also says it froze Sun’s large WLFI position to “prevent further harm” to the company and token holders, and argues that the freeze was permitted under Sun’s token unlock agreement.

Sun had previously sued World Liberty after claiming the project improperly froze his WLFI holdings and stripped him of governance rights. That turned the dispute into a two-sided legal fight involving token control, investor rights, public statements and alleged reputational damage. World Liberty says Sun made claims involving unauthorized transfers, straw purchases and short selling despite allegedly knowing the project had contractual rights to freeze assets.

The token-freeze dispute centers on events from late 2025, when Sun’s wallet was blacklisted and roughly 540 million WLFI tokens were frozen after the project flagged about $9 million in transfers as suspicious. Sun described the flagged activity as routine testing and argued that WLFI has a hidden blacklist function that can freeze assets without proper notice.

World Liberty alleges Sun privately threatened litigation and said his lawsuit would “light World Liberty on fire” and cause WLFI’s price to “go to shit.” World Liberty’s public statement said: “This is about the integrity of decentralized finance. When a major investor tries to destroy the project’s reputation, it threatens the trust of every holder. We cannot allow that.”

World Liberty also said Sun “launched a coordinated media smear campaign against World Liberty Financial and refused to stop even when confronted with the truth.” Sun rejected the defamation case, saying: “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.”

World Liberty further accuses Sun of hiring social media influencers and deploying bot accounts “to amplify his lies.” Sun also accused World Liberty’s operators of treating “the crypto community as a personal ATM” and labeled company leaders, including members of the Trump family, as “bad actors,” statements World Liberty now characterizes as defamatory and “profoundly harmful.”

WLFI and Trump-Linked Tokens Move After Lawsuit News

WLFI briefly climbed to $0.061 after the lawsuit news, even after a previous decline tied to governance concerns and the alleged private token sale. Trump-linked meme coins also saw volume spikes around the lawsuit news, though the move did not hold across the assets.

Sun had previously been one of the biggest backers of the Trump family’s crypto business, buying tens of millions of dollars worth of WLFI and millions of dollars worth of President Donald Trump’s Solana-based TRUMP meme coin, while claiming to be that asset’s top holder. The relationship later deteriorated, and Sun was absent from President Donald Trump’s Mar-a-Lago event for top holders of the TRUMP meme coin late last month.

The U.S. SEC earlier this year moved to settle its yearslong fraud case against Sun, a decision reported to have preceded the agency’s head of enforcement resigning shortly afterward. No court has made findings on the merits of World Liberty’s defamation allegations or Sun’s earlier claims, leaving both sides’ accusations unresolved in court.