- World Liberty Financial has officially filed a defamation lawsuit against Justin Sun for damaging the project’s reputation.
- According to the official post on X, a Justin Sun-linked entity transferred large numbers of tokens unfairly, which forced them to take action against him and freeze his token holdings.
- Justin Sun was allegedly running a coordinated media smear campaign against World Liberty as he wanted to drive the token price “to shit.”
The tussle between the Trump family-linked World Liberty Financial (WLFI) and Justin Sun is getting worse with every passing day. On Monday, World Liberty Financial shared a post on its official handle on X (formerly Twitter), where the DeFi project revealed that it filed a defamation lawsuit against Justin Sun, founder of the TRON blockchain.
In the thread, World Liberty Financial accused Justin Sun of launching a coordinated media smear campaign against World Liberty. Also, he allegedly ignored warnings when the DeFi project tried to confront him with the truth.
What World Liberty Financial Says About Its Lawsuit Against Justin Sun
The legal action came to light on May 4 after Justin Sun’s earlier lawsuit against the project. WLFI charged some serious allegations against Justin Sun, who was one of the major investors of the project. WLFI stated that Justin Sun has intentionally spread false and misleading statements about their project to damage its reputation. By doing this, he allegedly wanted to scare away users and investors and gain financial benefit for himself.
According to the official statement, this tussle started when Blue Anthem, an entity linked to Justin Sun, purchased a large number of WLFI tokens. “In Nov. 2024, Sun’s entity, Blue Anthem, purchased $WLFI tokens. Sun’s entities later engaged in prohibited transactions, including transfers of $WLFI tokens to Binance,” stated in the post.
After some time, the entity linked to Justin Sun has transferred some tokens in ways that violated the agreed-upon rules. In response to this matter, the project has decided to freeze those tokens to protect the project and community. This decision was also shared in the signed and public documents. According to the project, this was the pain point where Justin Sun got disappointed.
The project stated in the post on X, “Sun didn’t seek a good faith resolution. Instead, he launched a coordinated smear campaign. He called our governance a “scam,” claimed we installed “backdoors,” and accused us of treating the community as an “ATM.”
Instead of resolving the matter privately, Justin Sun launched a public attack on social media. Using his large following on X and paying influencers and bots, he called the project a scam, accused WLFI of having a secret backdoor that freezes tokens unfairly, and claimed the team treated users like a personal ATM.
WLFI argues that Sun knew these statements were false or made them without caring about the truth, even though he had earlier praised the project publicly and said he was fully on board with it.
The post stated that, “Sun’s claims are demonstrably false. The authorized freeze function Sun complains about was disclosed in our Terms of Sale and his own agreements. The governance process is transparent and community-driven. Yet he weaponized his platform to spread lies to more than 4 million followers.”
WLFI allegedly mentioned that Sun launched a campaign after they turned down his demands. They say that he even threatened, through his lawyers, to set World Liberty on fire with lawsuits if the project did not give in. His intention was to drop the token’s price to “to shit.”
In the lawsuit, World Liberty Financial is asking the court for money damages and a public retraction, which means a correction and apology from Justin Sun. They called their filing legal as a last option to protect their token holders, team, and the entire community.
What is Justin Sun Side’s Story?
In response to this counter lawsuit, Justin Sun shared a post on X, calling it a PR stunt. “As an investor, I have a clear conscience and look forward to prevailing in court,” he said.
(Source: Justin Sun on X)
Justin Sun said that he put in tens of millions of dollars because he believed the project followed the rules of decentralization.
According to Sun, the dispute started when WLFI secretly integrated dangerous features into the smart contract. Sun claimed that they installed a backdoor blacklisting function that was not properly disclosed to investors. This allowed the team or anonymous wallets to freeze his tokens without any good reason.
According to Justin Sun, this freezing was not fair, and it was targeted. After some of his tokens became tradable, WLFI froze a large portion of his holdings. He stated that he was treated differently from other investors and that the freeze occurred after he refused pressure to invest even more money, specifically hundreds of millions, into the project’s stablecoin and other initiatives.
He also slammed World Liberty Financial for using anonymous multisig wallets and a single guardian address that can freeze anyone’s tokens. He called this mechanism a dictatorship.
“I have tried in good faith to resolve this situation with the World Liberty project team without resorting to litigation. But the project team has refused my requests to unfreeze my tokens and restore my rights as a token holder. They have left me with no choice but to turn to the courts,” he said.
WLFI Soars 10% After Hitting All-Time Low
On May 4, WLFI12.90% token witnessed a spike of 10% on a daily chart following the project’s lawsuit against Justin Sun. This rebound in the cryptocurrency helps it to soar to around $0.06531 with an impressive market capitalization of around $2.07 billion, according to CoinMarketCap. This upward momentum in cryptocurrency comes amid bullish sentiment in the overall crypto market after Bitcoin broke above $80,000.
The surge in cryptocurrency comes after WLFI hit an all-time low on May 2, slipping below $0.05201 following Justin Sun’s lawsuit and regulatory challenges from Democrats. This uptrend in the cryptocurrency might provide temporary relief after a long free fall in the cryptocurrency. It will boost investors’ confidence.
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