Key Takeaways
- A Florida defamation lawsuit has been launched by World Liberty Financial targeting Justin Sun
- Allegations include short-selling WLFI tokens and transferring them to Binance in an effort to manipulate prices downward
- This marks the second lawsuit between the parties, following Sun’s April complaint about frozen tokens
- Following the lawsuit announcement, WLFI token jumped 12%, though it remains 72% below its initial trading price
- Revenue distribution shows the Trump family receiving over $1 billion, with 75% of all token sales flowing to them
The cryptocurrency project World Liberty Financial, co-launched by Donald Trump alongside his sons, has initiated defamation proceedings against Justin Sun, who was previously among its most prominent early supporters.
Filed on May 4 in a Florida state courthouse, the legal action centers on allegations that Sun orchestrated a coordinated campaign to tarnish the project’s standing through public statements.
According to World Liberty‘s complaint, Sun moved WLFI tokens containing governance privileges to the Binance cryptocurrency platform. The filing further contends he engaged in short-selling activitiesāessentially wagering on price declinesācoinciding with the token’s public market debut in September 2025.
Sun has firmly rejected these accusations, characterizing the legal action as “a meritless PR stunt” while expressing confidence in defending himself through judicial proceedings.
The current dispute represents the second courtroom confrontation between these entities. Sun initiated his own legal challenge in April through a San Francisco federal court, asserting that World Liberty unlawfully immobilized his token holdings, eliminated his governance participation rights, and issued threats to permanently destroy them.
In response, World Liberty maintained that token-freezing mechanisms were properly disclosed within the Terms of Sale documentation. The company accused Sun of improper behavior and dismissed his legal filing as “a desperate attempt to deflect attention.”
Transformation from Strategic Partner to Legal Adversary
Sun previously occupied a position as a crucial project supporter. His financial commitment totaled $45 million to World Liberty throughout late 2024 and early 2025, earning him an advisory role. Additionally, he acquired $100 million worth of Trump’s meme coins during July 2025.
Eric Trump previously characterized Sun as “a great friend and an icon in the crypto space.” When WLFI commenced public trading on September 1, 2025, Sun publicly declared his conviction that the project would become “one of the biggest and most important projects in crypto.”
That collaborative relationship has now completely deteriorated.
Market Performance and Investment Values
Sun’s holdings comprise 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% decline.
Following Monday’s lawsuit revelation, the token experienced a temporary surge of about 12%.
Revenue Distribution Structure
World Liberty’s governing documents allocate 75% of all WLFI token sale proceeds to the Trump family. According to a Reuters investigation, the family has already generated more than $1 billion from this enterprise.
Sun’s lawsuit asserted that specific individuals controlling World Liberty are exploiting the Trump name “to profit through fraud.” World Liberty categorically rejects any misconduct.
The Securities and Exchange Commission previously conducted an investigation into Sun regarding allegations that he compensated influencers for promotional activities without proper disclosure. Following the investigation’s closure, Senator Elizabeth Warren raised questions about potential connections to Sun’s investments in Trump’s cryptocurrency ventures.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
