World Liberty Financial Sues Investor Justin Sun Over Alleged Smear Campaign

World Liberty Financial, founded by the Trump and Witkoff families, accused crypto billionaire Justin Sun, one of its investors, of running a deliberate smear campaign against a company token he allegedly bet against.

"Justin Sun chose to defame World Liberty — repeatedly, publicly and to millions of followers. World Liberty filed this lawsuit as a last resort to correct the record and to protect its token holders, its employees and all its stakeholders," Tom Clare, the company's attorney, said in a press release.

"We are eager to expose the falsity of Sun’s statements in court and in public."

Sun, founder of the TRON blockchain platform, announced a $30 million investment in World Liberty Financial in November 2024 and called himself its largest backer at the time.

"We are thrilled to invest $30 million in World Liberty Financial as its largest investor. The U.S. is becoming the blockchain hub and Bitcoin owes it to [President Donald Trump]," Sun wrote on X.

World Liberty Financial accused Sun of first violating his investor agreement by shorting the WLFI token, a bet that would profit if the token's value fell. The company responded by freezing Sun's assets.

Sun then threatened to criticize the company publicly to his millions of online followers unless it released his holdings, according to World Liberty Financial.

"Justin Sun engaged in a defamatory campaign to torch World Liberty Financial’s reputation," Zach Witkoff, son of Trump's Special Envoy to the Middle East Steve Witkoff, posted on X. "He knew his claims were false and made them anyway to harm WLFI token holders. I look forward to the truth coming out in court."

Eric Trump and Donald Trump Jr. posted on X to support a company thread that accused Sun of "a coordinated media smear campaign against World Liberty Financial" and said he refused to stop despite evidence against his claims.

World Liberty Financial said Sun had previously praised the company online as "one of the biggest and most important projects in crypto" and claimed he was "fully aligned with the mission."

After the company refused to unfreeze his assets, Sun criticized its business and leadership structure and warned followers to avoid it. The lawsuit claims Sun used fake social media bot accounts to spread the message.

In a post with over 2 million views, Sun said the company built a feature allowing it to seize users' digital assets. "This feature grants the company unilateral power to freeze, restrict, or effectively confiscate the property rights of any token holder—without notice, without reason and without any avenue for recourse," Sun claimed, citing his own frozen assets as proof.

"The WLFI team's conduct is eroding the community's trust in the project. Unlock the tokens and uphold transparency to the community. Let us build with integrity, not with malfeasance," Sun said.

The U.S. Securities and Exchange Commission has previously accused Sun of selling unregistered securities, manipulating markets to inflate his assets' value and paying celebrities to promote products without disclosure.