On May 4, World Liberty Financial filed a defamation lawsuit against Justin Sun. The project accuses the Tron founder of running a coordinated campaign to discredit it in an effort to crash the price of the WLFI token.
Sun has already responded, calling the lawsuit baseless.
“The so-called defamation lawsuit that World Liberty announced today is nothing more than an empty publicity stunt with no basis whatsoever. As an investor, my conscience is clear, and I look forward to winning in court,” he said.
How It All Started
The dispute had already moved into court earlier. On April 22, Sun himself filed a lawsuit in federal court in California. According to his account, the WLFI team froze his tokens without warning, removed him from governance voting, and threatened to permanently destroy his stake. His attempts to resolve the conflict privately, he says, went nowhere.
At the same time, Sun publicly attacked a new governance proposal introduced by the project on April 15, calling it a trap: holders who refused to accept the terms would face an indefinite freeze on their assets. Sun himself can no longer vote against it because his tokens have been frozen.
How It Escalated to Court
According to the case, a Sun-linked entity called Blue Anthem purchased about 4.0 B non-transferable WLFI tokens between November 2024 and January 2025, investing $30.0 M, while also receiving 1.0 B tokens for joining the project’s advisory board.
According to World Liberty, Sun’s affiliated entities soon violated their agreements by allegedly transferring tokens to Binance, buying WLFI through proxy buyers, and opening short positions.
According to the lawsuit, on August 31, 2025, a wallet linked to HTX transferred three $100.0 M USDT tranches to Binance one day before WLFI’s public trading debut. The following day, the token lost about 26%, while open short interest jumped 23%. World Liberty then froze Blue Anthem’s tokens, citing terms in an agreement that Sun had personally signed.
The Public Attack
When negotiations finally broke down, Sun took the conflict to X, accusing WLFI of building a backdoor into its smart contract.
“The new voting mechanisms are theater, and WLFI is the team’s personal ATM,” Sun said.
The posts drew millions of views and spread across NBC News, Reuters, Bloomberg, Financial Times, The Guardian, CoinDesk, and The Block.
According to the plaintiff, Sun went beyond his own posts by allegedly hiring bloggers and deploying bots. In private communications cited in the lawsuit, Sun’s lawyers allegedly threatened to “set World Liberty on fire and crash WLFI” unless the project paid hundreds of millions of dollars.
On April 20, World Liberty sent a formal demand requiring Sun to withdraw all disputed statements. Sun refused.
What WLFI Wants
The project is seeking financial compensation, a public retraction, and reimbursement of legal expenses. It also plans to pursue punitive damages. The lawsuit cites specific harm, claiming that Native Market refused to work with WLFI specifically because of Sun’s statements.