Trump-linked crypto project World Liberty Financial has filed a defamation lawsuit against Tron founder Justin Sun, escalating an already bitter dispute. In a new complaint, the company claims Sun spread false and damaging statements about its business while secretly betting against its WLFI token.
According to filings reported by local media, World Liberty alleges that Sun led a “deliberate campaign” to portray the project as fraudulent and near collapse. The suit seeks monetary damages and a court order stopping him from making similar statements in the future. World Liberty’s official X account also announced the case, saying it was “taking action to protect its community.”
Dispute Follows Sun’s Earlier Lawsuit Over Frozen WLFI Tokens
The defamation claim lands just weeks after Sun himself sued World Liberty Financial in U.S. federal court. In that earlier filing, he accused the Trump-family–backed project of extortion, fraud, and illegally freezing his WLFI holdings, which he said were worth up to 1 billion dollars at peak prices.
Sun’s lawsuit alleges World Liberty secretly added a “blacklisting” function to its smart contracts that allowed it to freeze and potentially burn WLFI tokens without a governance vote. He claims the company then used this power to lock his tokens after he refused to invest more money or promote other products. World Liberty has denied those accusations and said it acted to address what it calls Sun’s “misconduct.”
Each Side Accuses the Other of Misconduct
In its new complaint, World Liberty argues that Sun’s public comments about the project’s finances and governance are false and intended to hurt its reputation. Reports say the company alleges Sun was shorting or otherwise profiting from WLFI’s price drop while criticizing the team in the press and on social media.
World Liberty’s leaders have publicly pushed back on Sun’s narrative, framing him as a disgruntled investor trying to pressure the project. They say the token freezes and restrictions were tied to compliance concerns, including questions around know‑your‑customer documentation and how some of Sun’s purchases were structured. Sun, meanwhile, maintains that those explanations are excuses and that the project abused its control over the token’s smart contracts.
Both lawsuits are still at an early stage, and none of the allegations have been proven in court. However, the cross‑claims of fraud, extortion, and defamation now hang over a project closely tied to U.S. President Donald Trump and his family.
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