Key Takeaways
- A defamation lawsuit has been filed in Florida by World Liberty Financial targeting Justin Sun
- Allegations include short-selling WLFI tokens and moving them to Binance with intent to depress market value
- Justin Sun initiated legal proceedings against World Liberty in April, alleging unauthorized token freezing
- Following the lawsuit announcement, WLFI token experienced a 12% surge, though remains down 72% from initial trading
- Revenue distribution shows the Trump family receiving 75% of token sale proceeds, totaling over $1 billion
The crypto project World Liberty Financial, established by Donald Trump alongside his sons, has initiated defamation proceedings against Justin Sun, who previously served as one of the venture’s most prominent early investors.
Florida state court received the filing on May 4. The complaint centers on accusations that Sun orchestrated a coordinated “public smear campaign” designed to harm the project’s standing.
According to World Liberty, Sun moved WLFI tokens carrying governance privileges to the cryptocurrency platform Binance. The company further contends he engaged in short-selling activities, wagering on declining token values, coinciding with the September 2025 public trading launch.
Sun has rejected these allegations entirely. His response characterized the legal action as “a meritless PR stunt” while expressing readiness for courtroom proceedings.
This marks the second litigation dispute involving these parties. Sun filed against World Liberty in San Francisco federal court during April. His complaint asserted unlawful freezing of his token holdings, removal of governance participation rights, and threats to permanently destroy the assets.
World Liberty countered by pointing to token-freezing provisions within the Terms of Sale documentation. The company characterized Sun’s behavior as improper and described his legal filing as “a desperate attempt to deflect attention.”
Relationship Shift: Supporter to Adversary
Sun’s initial position involved substantial project backing. His investment totaled $45 million across late 2024 and early 2025, accompanied by an advisory role appointment. Additionally, he acquired $100 million in Trump’s meme coins during July 2025.
Eric Trump previously described Sun as “a great friend and an icon in the crypto space.” When WLFI commenced trading on September 1, 2025, Sun publicly declared his belief that the project would become “one of the biggest and most important projects in crypto.”
That partnership has completely deteriorated.
Market Performance and Investment Value
Sun’s holdings comprise 4 billion WLFI tokens, presently valued near $264 million. Token valuation has plummeted from 31 cents to below 8 cents since trading commenced, representing approximately 72% depreciation.
A temporary 12% price increase occurred following Monday’s lawsuit disclosure.
Revenue Distribution Structure
Organizational bylaws for World Liberty allocate 75% of WLFI token sale proceeds to the Trump family. Reuters investigation determined the family has accumulated over $1 billion through this arrangement.
Sun’s lawsuit alleged that particular individuals managing World Liberty exploit the Trump brand “to profit through fraud.” World Liberty rejects all accusations of impropriety.
The Securities and Exchange Commission previously examined Sun regarding claims he compensated influencers for promoting his businesses without proper disclosure. Following the investigation’s closure, Senator Elizabeth Warren raised concerns about potential connections to Sun’s financial commitments in Trump’s cryptocurrency enterprises.
