Trump-linked WLFI sues Justin Sun over alleged short-selling smear
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World Liberty Financial, a group founded by the Trump and Witkoff families, is accusing crypto billionaire and one of its investors, Justin Sun, of waging a deliberate smear campaign to block a crypto product he allegedly bet against.
Tom Clare, attorney for World Liberty Financial, said, “Justin Sun has chosen to repeatedly smear World Liberty, publicly and to its millions of followers. World Liberty filed this lawsuit as a last resort to set the record straight and protect its token holders, employees, and all of its stakeholders.” he said. in a press release.
“We look forward to exposing the falsity of Sun’s statements in court and in public.”
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Tron founder Justin Sun at the Token2049 conference in Singapore on Thursday, October 2, 2025. (Suhaimi Abdullah/Bloomberg via Getty Images)
Sun, a crypto deal maker and founder of the TRON blockchain, a cryptocurrency platform, announced a $30 million investment in WLFI in November 2024, calling himself the company’s biggest supporter at the time.
“We are excited to invest $30 million in World Liberty Financial as its largest investor. The United States is becoming the blockchain hub and Bitcoin owes it to it.” [President Donald Trump]In a post to X, Sun wrote:
Two years later, World Liberty Financial accuses Sun of violating his agreement with the company as an investor by first shorting WLFI’s token; This position was one that would allow the company to make a profit if its value decreased.
In response, World Liberty Financial froze Sun’s assets.
Sun then threatened to publicly criticize the company to his millions of followers online if the company did not disclose its holdings, according to World Liberty Financial.
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TRON founder Justin Sun at the Bitcoin 2025 conference in Las Vegas, Nevada, USA on Tuesday, May 27, 2025. (Bridget Bennett/Bloomberg via Getty Images)
“Justin Sun ran a smear campaign to burn the reputation of World Liberty Financial,” Zach Witkoff, son of Trump’s Special Representative for the Middle East Steve Witkoff, said on X. “He knew his claims were false and made them anyway to harm WLFI token holders. I look forward to the truth coming out in court.”
Eric and Donald Trump Jr. also went to X. strengthen a thread A post shared by Sun’s companies, which accused Sun of “a coordinated media smear campaign against World Liberty Financial” and said he “refused to stop even when confronted with the truth.”
World Liberty Financial claimed that Sun praised the company online, calling it “one of the largest and most important projects in crypto” and that it was “fully aligned with the mission.”
When the company did not freeze its assets, Sun published criticism of the company, blasting World Liberty Financial’s business and leadership structure and warning viewers to stay away from the organization. According to World Liberty Financial’s lawsuit, Sun even used fake social media “bot” accounts to amplify the claims.
In a post that received over 2 million views, Sun claimed that the company was developing a feature that would allow users to seize their digital assets.
“This feature gives the company the authority to unilaterally freeze, restrict, or effectively seize the property rights of any token holder without prior notice, reason, and any recourse,” Sun said.
Sun cited his own digital assets as proof of his claims.
“WLFI team’s behavior erodes the community’s trust in the project. Unlock tokens and support transparency to the community. Let’s build with integrity, not abuse,” Sun said in his post.
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The seal of the U.S. Securities and Exchange Commission is affixed to the wall of SEC headquarters in Washington on June 19, 2015. On Thursday, February 22, 2024, a Houston man pleaded guilty to securities fraud for trading inside information obtained from his wife’s business meetings while they both worked from home. (AP Photo/Andrew Harnik, File)
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Notably, the U.S. Securities and Exchange Commission (SEC) has accused Sun in the past of selling unregistered securities, manipulating the market to inflate the value of his assets, and paying celebrities to promote his products without disclosure.
In this case, SEC and Sun an agreement was reached He paid $10 million earlier this year, but Sun has denied any wrongdoing.
