Justin Sun faces defamation lawsuit from World Liberty in WLFI token controversy
World Liberty Financial has accused Sun of defamatory conduct and breaching token sale agreements, alleging he shorted WLFI tokens and facilitated unauthorized straw purchases for third parties.
World Liberty Financial has launched a defamation lawsuit targeting Justin Sun, the founder of Tron, in a Florida court, intensifying an ongoing legal conflict between the cryptocurrency platform associated with the Trump family and one of its most significant token holders.
Filed on Monday with the Eleventh Judicial Circuit Court in Miami-Dade County, the legal complaint alleges that Sun disseminated false public claims regarding World Liberty and breached the terms governing WLFI token sales through purported unauthorized token transfers, engaging in short-selling activities, and orchestrating straw purchases on behalf of third parties.
The legal filing further accuses Sun of circulating defamatory remarks about the cryptocurrency platform, with World Liberty seeking both a court-mandated retraction and financial damages from the blockchain entrepreneur. In response, Sun refuted the accusations through a Monday statement on X, characterizing the lawsuit as a "meritless PR stunt" while expressing confidence in prevailing against the claims in legal proceedings.
The legal action arrives fewer than two weeks following Sun's own lawsuit against World Liberty concerning the freezing of his WLFI token holdings, a controversy that has heightened examination of the project's mechanisms for token control and its governance framework.
The intensifying legal dispute emerges after a wave of increasing criticism directed at the cryptocurrency platform, which faced examination over a governance proposal that would impose an additional two-year lockup requirement for early participants holding the WLFI token, as Cointelegraph documented on April 16.
Sun characterized the governance proposal as "one of the most absurd governance scams I have ever seen."
United States President Donald Trump alongside his sons, Donald Trump Jr. and Eric Trump, are identified as co-founders of the cryptocurrency platform, as documented in World Liberty's official white paper.
Sun was fully aware of WLFI's token freezing rights, lawsuit claims
Sun's wallet address associated with WLFI tokens was placed on a blacklist in September 2025 following alerts from blockchain analytics platforms regarding an approximately $9 million token transfer. Sun maintained that his presale token holdings were frozen without justification and called upon the project team to release his locked investment.
The lawsuit, however, asserts that Sun was "fully aware of World Liberty's right to freeze user tokens to protect its token holders and its community" and that he consented to these conditions within the project's Terms of Sale documentation.
"Rather than acting in good faith, Justin Sun chose to defame World Liberty — repeatedly, publicly, and to millions of followers," stated Tom Clare, legal counsel representing World Liberty Financial, characterizing the lawsuit as a "last resort" action intended to safeguard its token investors and staff members.
The legal complaint contends that Sun had previously consented to WLFI's "freezing authority" before subsequently characterizing it publicly as a concealed "trap door" in what the platform describes as a deliberate strategy to "harm World Liberty while potentially benefiting his own financial positions."
The lawsuit contributes to existing governance questions surrounding WLFI, following a March voting event that revealed 76% of voting authority originated from just 10 wallet addresses. Sun identified this as a troubling indication of centralized control. WLFI responded by accusing Sun of disseminating unfounded allegations to obscure his own improper conduct and issued warnings of potential legal consequences.
The WLFI token experienced a 5% price increase during the 24-hour period preceding 1:43 p.m. UTC on Monday, though it remains down more than 80% from its initial launch price, based on data from CoinMarketCap.