World Liberty Financial Files Defamation Suit Against Justin Sun as WLFI Gains 12%
World Liberty Financial filed a defamation lawsuit against Tron founder Justin Sun on May 4 in the Eleventh Judicial Circuit Court for Miami-Dade County, Florida, accusing him of orchestrating a coordinated media campaign to suppress the WLFI token price. The complaint alleges Sun used press contacts, paid influencers, and bots to amplify false statements after the project froze his token holdings in September 2025. WLFI traded near $0.06 on the day of filing, up approximately 12% over 24 hours, though the token remains more than 75% below its all-time high.
Allegations of Short Selling and Straw Purchases
The core of WLFI’s complaint centres on three categories of alleged misconduct. First, the project claims Sun’s entity Blue Anthem purchased WLFI tokens on behalf of undisclosed third-party investors, a practice the filing describes as straw buying in violation of token sale terms. Second, WLFI alleges Sun engaged in short selling during the token’s public launch, describing “a large, deliberate, short-selling campaign designed to suppress $WLFI’s price,” linked to Sun-affiliated wallets that moved $300 million to Binance. Third, the project argues that Sun’s subsequent public statements, made to an audience exceeding four million followers on X, were knowingly false because Sun had previously agreed in writing to the platform’s token freeze authority.
The freeze itself, which locked 540 million unlocked tokens and 2.4 billion locked WLFI held by Sun-affiliated wallets, was triggered in September 2025 after blockchain data platforms flagged a roughly $9 million transfer. WLFI contends the freeze function was disclosed in its Terms of Sale and in Sun’s own purchase agreements, making his subsequent characterisation of it as a hidden “trap door” or “backdoor” factually insupportable. World Liberty attorney Tom Clare described the lawsuit as a “last resort” measure. The filing seeks unspecified damages, legal costs, and a court-ordered public retraction.
Sun’s Prior Lawsuit and the Parallel Proceedings
Sun filed his own federal lawsuit in California in late April, alleging that WLFI fraudulently blocked his ability to sell tokens and stripped him of governance voting rights. That case remains active, and the two proceedings now run in parallel across separate jurisdictions, with no hearing date yet set in the Florida matter. Sun’s total investment in WLFI reached approximately $75 million, comprising an initial $30 million commitment in November 2024 and subsequent purchases; he also spent roughly $100 million on the Official Trump memecoin. The scale of that exposure gives the dispute meaningful market relevance beyond its legal dimensions.
Sun responded to the defamation filing on X the same day, writing: “The alleged defamation lawsuit that World Liberty announced on X today is nothing more than a meritless PR stunt. I stand by my actions and look forward to defeating the case in court.” The dispute sits against a broader governance controversy at WLFI; as detailed in World Liberty Financial’s 62B token vesting plan, a proposal in April to impose a two-year lock-up on early investors drew sharp criticism, with Sun calling it “one of the most absurd governance scams I have ever seen.” A March governance vote also showed that 76% of voting power was concentrated among just 10 wallets, a structural detail that lends credibility to Sun’s concerns about centralisation even as WLFI contests his specific factual claims. Both cases now proceed simultaneously, with the contractual scope of WLFI’s freeze authority as the pivotal question that courts in two states will eventually have to answer.
