Donald Trump‘s cryptocurrency company has filed a defamation lawsuit against one of its biggest early backers, turning what was once a lucrative partnership into an all-out legal war. World Liberty Financial accused crypto billionaire Justin Sun of running a coordinated campaign to destroy the company after a financial dispute over frozen tokens.
According to ABC News, the lawsuit was filed Monday in the Eleventh Judicial Circuit Court in Miami-Dade County, Florida. It comes weeks after Sun filed his own suit against World Liberty Financial in a federal California court, accusing the company of illegally blocking him from selling digital tokens he claimed were worth up to $1 billion.
World Liberty Financial, co-founded by Donald Trump and his sons, denied Sun’s fraud allegations and fired back with defamation claims. In its filing, the company alleged Sun launched a “scorched-earth pressure campaign” after his tokens were frozen, with his legal team threatening litigation designed to “light World Liberty on fire.”
What World Liberty Financial says Sun did
The company’s lawsuit, paints a picture of an investor who turned hostile after World Liberty Financial refused to meet his demands. According to the filing, Sun’s legal team pushed for the release of hundreds of millions of dollars’ worth of cryptocurrency. When the company refused, Sun allegedly went public with a smear campaign.
“Sun weaponized his money and his influence within the industry, hiring influencers and deploying fake social-media ‘bot’ accounts to amplify his lies,” the suit states. “His actions were coordinated, deliberate, and aimed at burning World Liberty to the ground.”
World Liberty Financial says it froze Sun’s tokens in the first place to protect its token holders after discovering alleged misconduct. The company claims Sun was short selling its $WLFI tokens and using third parties to make so-called straw purchases, buying tokens under other names to hide his identity. The company says the ability to freeze tokens was disclosed in its Terms of Sale.
The lawsuit also alleges that Sun made false claims on social media, including that the company treats “the crypto community as a personal ATM” and that its governance practices were improper. Those posts were viewed millions of times and generated widespread media coverage, which World Liberty Financial says caused serious damage to its reputation.
Justin Sun calls it a ‘meritless PR stunt’
Sun pushed back immediately. In a statement to Reuters, he said: “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.”
Sun’s side of the story, laid out in his earlier April lawsuit, is that World Liberty secretly added a “blacklisting” function to its smart contracts that allowed it to freeze and potentially eliminate WLFI tokens without a governance vote. He claims that power was used against him after he refused to invest more money or promote other World Liberty products.
World Liberty Financial’s CEO and co-founder Zach Witkoff also weighed in on X, writing that he “look forward to the truth coming out in court.”
Donald Trump Jr., another co-founder of the venture, reposted the company’s thread laying out its claims and urged his followers to “Read this entire thread for the truth!!!!”
How a $200 million relationship fell apart
The legal clash is a dramatic reversal of fortune for both sides. Sun had poured nearly $200 million into Trump-linked crypto ventures overall, including approximately $75 million into World Liberty Financial’s own $WLFI tokens and another $100 million acquiring President Trump’s $TRUMP memecoin. He was even among the exclusive group of top memecoin holders who attended a dinner where Trump spoke.
The relationship started unraveling when World Liberty Financial froze Sun’s assets, and it has escalated rapidly since. Neither side shows any sign of backing down, with both lawsuits still in early stages and no allegations proven in court.
The dispute adds to a broader cloud of controversy around the Trump family’s crypto ventures, which critics have long flagged as potential conflicts of interest. The White House has consistently pushed back on those concerns. “Neither the President nor his family have ever engaged, or will ever engage, in conflicts of interest,” press secretary Karoline Leavitt said in a prior statement to Fortune.
The situation also echoes broader financial tensions in the Trump orbit. The president has previously drawn scrutiny for his economic positions, including coverage of how Donald Trump dismissed the highest inflation in four years as “fake.” Critics in Congress have also taken aim at the administration more broadly, with some lawmakers going as far as trying to remove Donald Trump via the 25th Amendment.
Sun’s earlier SEC troubles also resolved under the Trump administration. A fraud lawsuit the Biden-era SEC had filed against him was settled in March for $10 million, a resolution critics described as unusually favorable for the crypto mogul.
