World Liberty alleged that Sun engaged in short-selling, straw purchases and defamation.
May 4, 2026, 1:25 p.m. 2 min read
World Liberty Financial, the cryptocurrency company affiliated with U.S. President Donald Trump and his family, filed a defamation lawsuit against Tron creator Justin Sun in a Florida state court Monday, alleging “gross misconduct” from Sun over WLFI tokens he bought.
The lawsuit comes on the heels of Sun’s own lawsuit against World Liberty, which was filed in a federal California court, alleging World Liberty had unfairly frozen his ability to transfer his WLFI tokens. In Monday’s suit, World Liberty alleged that Sun-related entities bought WLFI tokens for other investors through straw purchases and may have “engaged in short selling” of the token.
World Liberty froze Sun’s WLFI tokens “to protect” itself “and the broader community as a result, the lawsuit said, adding that Sun’s tweets complaining about his tokens being frozen contain false or defamatory information.
Sun allegedly hired influencers and used bots to “amplify his lies,” World Liberty claimed, and as a result the company said it had “lost specific business opportunities.”
Many portions of the lawsuit were redacted, including portions describing Sun’s purchase of the tokens and sections about his alleged misconduct.
This alleged misconduct includes what World Liberty describes as “a large, deliberate, short-selling campaign designed to suppress $WLFI’s price at the moment of its public launch,” which the suit tied to Sun-affiliated wallets moving $300 million to Binance.
“Upon discovering these violations, World Liberty exercised its contractual rights to freeze Sun’s entities’ tokens to prevent further harm to World Liberty and the broader $WLFI community, an ability that Sun knew about well before this action was taken,” the lawsuit said.
One issue Sun knew about prior to his tweets was that World Liberty had the ability to freeze tokens, the suit said throughout the filing.
“Not only was Sun aware of the agreements’ terms, but Sun also knew through his personal experience that the defamatory statements were false because he (and the public) knew that World Liberty had the power to restrict the transferability of tokens,” the suit said.
The suit alleged defamation and calls for damages, expenses and retraction of Sun’s statements.
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Nikhilesh De