Trump-Linked World Liberty Financial Accuses 'Victimized' Crypto Billionaire of Defamation

Source: Gizmodo

World Liberty Financial has filed a defamation lawsuit against crypto billionaire Justin Sun, escalating a legal battle that began when Sun sued the Trump-affiliated project last month over claims that it unfairly froze his WLFI token holdings. The back-and-forth pits two controversial players against each other in what amounts to a public finger-pointing contest, with World Liberty Financial tied closely to the Trump family through co-founders including Donald Trump Jr. and Eric Trump, who have helped oversee a venture that played a key role in reportedly generating more than $1.4 billion in crypto-related income for the family in 2025 alone.

From World Liberty Financial’s perspective, Sun crossed the line after the company froze his tokens to protect the ecosystem. In its X thread posted Monday morning, the project detailed how Sun’s entities allegedly engaged in prohibited transfers of WLFI tokens to Binance, straw purchases, and short sales while fully aware of the company’s contractual right to freeze holdings. It accused him of launching a coordinated smear campaign that is intended to tank the price of WLFI, which is already down more than 70% over the past year. The lawsuit seeks damages and a public retraction of Sun’s statements to his nearly 4 million X followers.

Sun tells a different story. He began complaining about the freeze in September, shortly after WLFI tokens became tradable, and filed his own federal lawsuit in California last month. Court filings show he purchased around 3 billion WLFI tokens starting in 2024 (worth around $45 million at the time), in addition to another 1 billion he received as an advisor. He alleges the company secretly installed tools allowing it to freeze, restrict, or even burn his holdings without cause, stripped his voting rights, and pressured him to make additional investments up to $200 million in a related stablecoin. Notably, Sun ramped up his public attacks on World Liberty Financial only after the SEC settled its long-running case against him and his companies in March for $10 million. He has since referred to himself as a “victim” of the company.

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Recent controversies around World Liberty Financial include borrowing roughly $75 million in stablecoins by pledging 5 billion WLFI governance tokens as collateral on the closely affiliated Dolomite lending platform. Critics compared the move to FTX’s circular borrowing tactics before its 2022 collapse. Separately, a recent Bloomberg report revealed the project quietly sold an additional 5.9 billion WLFI tokens to private investors for hundreds of millions of dollars while early buyers remained locked out of 80% of their holdings with no clear unlock schedule.

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Read more: https://gizmodo.com/trump-linked-world-liberty-financial-accuses-victimized-crypto-billionaire-of-defamation-2000754267