World Liberty Financial filed a defamation lawsuit against Tron founder Justin Sun in Florida, escalating a legal fight between the Trump family-linked crypto platform and one of its largest investors.
The lawsuit, filed Monday in the Eleventh Judicial Circuit Court for Miami-Dade County, accused Sun of making false public statements about World Liberty and violating WLFI token-sale terms through alleged prohibited transfers, short-selling and straw purchases.
The lawsuit also accused Sun of spreading defamatory statements surrounding the crypto platform, demanding a court-ordered retraction and compensation from the founder. Sun denied the allegations in a Monday post on X, calling the lawsuit a “meritless PR stunt” and saying he looked forward to defeating the case in court.
The lawsuit comes less than two weeks after Sun sued World Liberty over the freezing of his WLFI tokens, a dispute that has intensified scrutiny of the project’s token controls and governance structure.
The escalating legal battle follows a period of growing backlash towards the crypto platform, which came under scrutiny for a proposal seeking to add a further two-year lock-up period for early investors holding the WLFI token, Cointelegraph reported on April 16.
Sun called the proposal “one of the most absurd governance scams I have ever seen.”
WLFI court filing against Justin Sun. Source: World Liberty Financial / Businesswire
US President Donald Trump and his sons, Donald Trump Jr. and Eric Trump, are listed as the co-founders of the platform, according to World Liberty’s white paper.
Related: Justin Sun presses WLFI to identify wallets behind freeze powers
Sun was fully aware of WLFI’s token freezing rights, lawsuit claims
Sun’s WLFI token address was blacklisted in September 2025 after blockchain data platforms flagged it for a roughly $9 million transfer. Sun said his presale tokens were unreasonably frozen and urged the team to unlock his investment.
However, the lawsuit claims that Sun was “fully aware of World Liberty’s right to freeze user tokens to protect its token holders and its community” and that he agreed to it in the project’s Terms of Sale.
“Rather than acting in good faith, Justin Sun chose to defame World Liberty — repeatedly, publicly, and to millions of followers,” Tom Clare, attorney for World Liberty Financial, claimed, adding that the lawsuit was a “last resort” measure seeking to protect its tokenholders and employees.
The lawsuit claims that Sun previously agreed to WLFI’s “freezing authority” before publicly calling it a hidden “trap door” in a calculated effort to “harm World Liberty while potentially benefiting his own financial positions.”
The lawsuit adds to WLFI’s prior governance concerns, after a March vote showed that 76% of voting power came from 10 wallets. Sun called that an alarming sign of concentrated influence. WLFI clapped back and accused Sun of spreading baseless allegations to cover up his own misconduct and threatened legal action.
WLFI/USD, all-time chart. Source: CoinMarketCap
The WLFI token rose 5% in the 24 hours leading up to 1:43 p.m. UTC on Monday, but is down over 80% since launch, according to CoinMarketCap data.
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