- World Liberty froze Sun’s four billion WLFI tokens after alleged prohibited transfers to Binance.
- Sun allegedly moved $300 million to Binbase the day before WLFI launched for public trading.
- Sun called World Liberty governance a scam and claimed smart contracts had hidden backdoors.
World Liberty Financial, the defi project associated with the Trump and Witkoff families, has filed a defamation lawsuit against Justin Sun, the billionaire founder of the TRON blockchain. They are accusing him of carrying out a coordinated smear campaign after the company froze his token holdings over alleged misconduct.
The complaint, filed in Florida, alleges Sun used his platform of nearly four million followers on X to spread false claims about World Liberty’s governance, token contract, and business practices after the company exercised its contractual right to freeze tokens held through his entity Blue Anthem.
What Triggered the Dispute
Sun’s entity purchased approximately four billion WLFI tokens in late 2024 and early 2025 for around $30 million, with an additional billion tokens granted in exchange for serving on World Liberty’s Advisory Board. The tokens were non-transferable under the agreed terms.
World Liberty alleges that Sun’s entities violated those terms in several ways, including transferring WLFI tokens to Binance and conducting what the complaint describes as straw purchases of tokens on behalf of undisclosed third parties.
The company also alleges Sun or his affiliates engaged in short selling WLFI tokens while simultaneously holding billions of locked tokens, with on-chain data showing roughly $300 million moved to Binance the day before WLFI opened for public trading. The following day, WLFI’s price fell approximately 26% while short positions surged.
World Liberty froze Sun’s tokens using authority it says was clearly disclosed in the Token Unlock Agreement Sun had signed.
Sun’s Response and the Smear Campaign
Rather than seek a resolution, World Liberty alleges Sun threatened litigation designed, in his own words, to “light World Liberty on fire” and cause the token price to “go to shit.” When the company refused to capitulate, Sun allegedly took to social media, calling World Liberty’s governance a scam, claiming the smart contract contained backdoors, and accusing the company of treating the crypto community as a personal ATM.
World Liberty further alleges Sun hired influencers and deployed bot accounts to amplify those claims, calling the campaign coordinated and deliberate.
Sun has denied wrongdoing. World Liberty says his claims are demonstrably false and that the freeze function he complained about was disclosed in publicly available terms before he ever purchased tokens.
Defamation Claims and Legal Fallout
World Liberty is seeking damages for defamation and reputational harm. The company says major media outlets that reported Sun’s claims without scrutiny, despite his prior SEC fraud accusations, should be ashamed of themselves.
Related: Crypto Clash: Justin Sun Questions WLFI’s True Governance Model
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