TLDR
- WLFI filed a Florida defamation lawsuit against Justin Sun.
- The case centers on alleged short selling and public attacks.
- WLFI says Sun-linked wallets made banned token transfers.
- Sun earlier sued WLFI and accused it of freezing assets.
- The dispute comes as WLFI faces token unlock concerns.
World Liberty Financial has sued Tron founder Justin Sun in Florida, accusing him of defamation and an alleged short and distort attack on WLFI. The Trump-linked DeFi project says Sun secretly bet against the token while publicly criticizing it. Sun had earlier sued WLFI, alleging fraud and the wrongful freeze of his holdings after a dispute.
WLFI Files Defamation Suit in Florida
World Liberty Financial filed the lawsuit in Miami-Dade County on May 4. The case accuses Sun of making false claims about the WLFI project. It says his comments helped damage trust in the token during heavy market pressure.
The complaint says Sun called WLFI a “scam” and a “sham.” It also says he claimed the project used “backdoors” and treated users as an “ATM.” WLFI argues those statements were false and harmful. The project says Sun used his large social media reach to spread the claims.
His X account has more than 4 million followers. WLFI also alleges he used paid influencers and bots to spread the same message. WLFI says the campaign followed its decision to freeze Sun-linked tokens. The company says the freeze was allowed under its terms. It also says the tool was disclosed in purchase documents and related agreements.
Token Freeze and Short Selling Claims
The dispute began after Sun-linked entities bought WLFI tokens through Blue Anthem in November 2024. WLFI says those entities later made prohibited transfers. The lawsuit names transfers of WLFI tokens to Binance as part of the alleged conduct.
Court claims also refer to onchain activity before public trading began. WLFI alleges wallets tied to Sun moved $300 million in USDT to Binance on August 31, 2025. The project says it acted to protect the token ecosystem. Sun has denied wrongdoing in his own legal action. He sued WLFI in California federal court in April. His complaint accused the project of fraud, coercion, and using a secret blacklisting function to freeze investor assets.
WLFI rejects that claim. It says the freeze function was authorized and contractually disclosed. The company also says its governance process is open and community-based. The legal fight now covers both contract rights and public statements. WLFI seeks compensatory and punitive damages. Sun’s case seeks the release of frozen WLFI tokens, which he says could be worth up to $1 billion.
Governance Dispute Adds Market Pressure
The lawsuit comes during a tense period for WLFI holders. A governance proposal would place 62.3 billion locked tokens under a new vesting schedule. The plan includes a two-year cliff and a multi-year release period.
The proposal also includes a 10% burn of team allocations. Some holders have raised concerns about lockups and future supply. Reports about private token sales have added more pressure on WLFI’s market price. WLFI says Sun’s alleged campaign came during this sensitive period. The company claims his statements were designed to push the token lower. It cited alleged remarks about driving the price “to shit.”
The case may test how courts view freeze powers in DeFi token agreements. It may also test how public comments by large investors are treated during token disputes. For now, WLFI and Sun remain locked in parallel legal battles in Florida and California.
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