World Liberty Financial fires back at Justin Sun over alleged defamation in new lawsuit

Donald Trump-backed World Liberty Financial (WLFI) has filed a defamation lawsuit against Tron founder Justin Sun in Florida state court on Monday. The filing accused him of orchestrating a coordinated campaign to damage the project's reputation.

"Sun launched a defamatory smear campaign in conjunction with press outlets that gleefully shared his lies. Sun's lies were designed, in his own words, to drive the token price 'to shit,'" WLFI wrote in an X post.

WLFI accuses Sun of coordinated smear campaign after token freeze

WLFI alleged that Sun launched the effort after the platform froze tokens tied to his entities for alleged violations of the project's terms. The holdings, purchased through his vehicle Blue Anthem in late 2024, were restricted following what WLFI described as prohibited transactions.

The project claims Sun engaged in unauthorized token transfers to Binance, used straw purchasers and may have attempted to short WLFI tokens. In response to the token freeze, Sun leveraged his social media presence, along with paid influencers and automated bots, to spread false claims that the project was a "scam," contained hidden backdoors and exploited its community.

"Sun has launched a coordinated media smear campaign against World Liberty Financial and refused to stop even when confronted with the truth," noted WLFI.

The firm added that its token freeze mechanism was fully disclosed in its Terms of Sale and agreements signed by Sun. WLFI also accused several media outlets of amplifying what it described as misleading claims, pointing to Sun's prior regulatory scrutiny, including past fraud allegations from the US Securities and Exchange Commission (SEC).

The lawsuit marks the latest escalation in a growing dispute between the two parties. Sun was among WLFI's largest backers but later clashed with the project over governance and token controls.

He filed a separate lawsuit against WLFI in California federal court in April, alleging the project unlawfully froze his WLFI holdings.

Sun argued the firm stripped him of voting rights and included threats to permanently destroy his tokens, describing the move as coercive. WLFI has rejected those claims, calling them meritless.

In response to the lawsuit, Sun stated in a Monday X post that WLFI's efforts are "nothing more than a baseless PR stunt. As an investor, I have a clear conscience and look forward to prevailing in court."

WLFI is up 10% over the past 24 hours, as of the time of writing. The token is attempting to test the 20-day Exponential Moving Average (EMA), which has served as resistance since August.

A move above the 20-day EMA will see WLFI face resistance at the 50-day EMA, just below the $0.085 hurdle. On the downside, support is located at $0.051.