Trump’s Crypto Company Strikes Back: World Liberty Financial Sues Justin Sun for Defamation

Key Takeaways

• World Liberty Financial initiated defamation proceedings in Florida targeting Justin Sun
• Allegations include Sun engaging in short-selling activities and moving WLFI tokens to Binance with intent to manipulate pricing
• Sun had already launched legal action against World Liberty in April over frozen token assets
• The WLFI token experienced a 12% surge following lawsuit disclosure but remains 72% below initial trading levels
• Revenue distribution shows 75% of token sales flowing to the Trump family, generating over $1 billion

The cryptocurrency platform World Liberty Financial, established through a partnership with Donald Trump and his family members, has initiated defamation proceedings against Justin Sun, previously among its most significant financial supporters.

https://twitter.com/coinbureau/status/2051292790693540220?s=20

Court documents were submitted to Florida’s state judicial system on May 4. The complaint accuses Sun of orchestrating a coordinated effort to publicly malign the venture and undermine its credibility.

Sun has rejected these accusations outright. Through his representatives, he characterized the legal action as “a meritless PR stunt” and expressed confidence in his courtroom defense.

This marks the second round of litigation between these entities. Sun filed his own lawsuit against World Liberty in April through San Francisco’s federal court system. His complaint alleged unauthorized freezing of his token holdings, elimination of his governance participation rights, and threats to permanently destroy the assets.

World Liberty countered that token freezing provisions were explicitly outlined in contractual documentation. The company accused Sun of improper behavior and dismissed his legal challenge as “a desperate attempt to deflect attention.”

The Transformation from Strategic Partner to Courtroom Opponent

Sun’s involvement began as a cornerstone supporter. His financial commitment totaled $45 million across late 2024 and early 2025, earning him an advisory position. He expanded his Trump-related investments by purchasing $100 million worth of Trump’s meme coins in July 2025.

Eric Trump previously praised Sun as “a great friend and an icon in the crypto space.” On September 1, 2025, when WLFI trading commenced, Sun publicly declared his conviction that the project would become “one of the biggest and most important projects in crypto.”

That alliance has now completely deteriorated.

Market Performance and Financial Exposure

Sun’s portfolio includes 4 billion WLFI tokens, presently valued at approximately $264 million. Since trading commenced, the token has plummeted from 31 cents to below 8 cents, representing roughly a 72% depreciation.

The token did experience a temporary 12% price increase after Monday’s lawsuit became public knowledge.

Revenue Distribution Structure

World Liberty’s organizational framework allocates 75% of proceeds from WLFI token transactions to the Trump family. According to Reuters’ financial analysis, the family has already secured more than $1 billion through this arrangement.

The Securities and Exchange Commission previously examined Sun regarding allegations that he compensated social media influencers to promote his business interests without proper disclosure. Following the investigation’s closure, Senator Elizabeth Warren raised concerns about potential connections between that outcome and Sun’s financial involvement with Trump’s cryptocurrency enterprises.

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