Once Called a “Great Friend,” Justin Sun Is Now Being Sued by Trump’s Crypto Firm

TLDR

World Liberty Financial filed a defamation lawsuit in Florida against Justin Sun Sun is accused of short-selling WLFI tokens and transferring them to Binance to drive down the price Sun previously sued World Liberty in April, claiming his tokens were illegally frozen WLFI token rallied 12% on lawsuit news but is still down 72% since trading began The Trump family has made over $1 billion from World Liberty, with 75% of token sale revenue going to them

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World Liberty Financial, the crypto venture co-founded by Donald Trump and his sons, has filed a defamation lawsuit against Justin Sun, one of its earliest and biggest backers.

JUST IN: WORLD LIBERTY FINANCIAL SUES JUSTIN SUN FOR DEFAMATION

World Liberty Financial has filed a defamation lawsuit against Justin Sun, accusing him of orchestrating a coordinated smear campaign after the platform froze WLFI tokens tied to alleged prohibited transactions… pic.twitter.com/HwX6tpBfbF

— Coin Bureau (@coinbureau) May 4, 2026

The lawsuit was filed in Florida state court on May 4. World Liberty claims Sun ran a “public smear campaign” against the project to damage its reputation.

World Liberty alleges Sun transferred WLFI tokens with voting rights to crypto exchange Binance. It also claims he short-sold the token, placing bets that its price would fall, just as public trading launched in September 2025.

Sun denied the claims. He called the lawsuit “a meritless PR stunt” and said he looked forward to fighting it in court.

This is the second legal battle between the two parties. In April, Sun sued World Liberty in a San Francisco federal court. He alleged the company illegally froze his tokens, stripped him of governance voting rights, and threatened to “burn” them entirely.

World Liberty responded by saying the ability to freeze tokens was disclosed in the Terms of Sale. It accused Sun of misconduct and called his lawsuit “a desperate attempt to deflect attention.”

From Major Backer to Legal Enemy

Sun was once a key supporter of the project. He invested $45 million in World Liberty in late 2024 and early 2025 and was named an adviser. He also bought $100 million of Trump’s meme coins in July 2025.

Eric Trump once called Sun “a great friend and an icon in the crypto space.” On September 1, 2025, the day WLFI began trading, Sun posted that he believed it would be “one of the biggest and most important projects in crypto.”

The relationship has since broken down entirely.

Token Price and Financial Stakes

Sun holds 4 billion WLFI tokens, currently worth around $264 million. The token has dropped from 31 cents to under 8 cents since trading started, a fall of roughly 72%.

The token did briefly rally around 12% following news of Monday’s lawsuit.

Where the Money Goes

World Liberty’s bylaws direct 75% of revenue from WLFI token sales to the Trump family. A Reuters analysis found the family has already made more than $1 billion from the venture.

Sun alleged in his lawsuit that certain individuals running World Liberty are using the Trump brand “to profit through fraud.” World Liberty denies all wrongdoing.

The Securities and Exchange Commission had previously investigated Sun over allegations he paid influencers to promote his companies without disclosure. That investigation was dropped, prompting questions from Senator Elizabeth Warren about whether it was connected to Sun’s investments in Trump’s crypto ventures.

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