World Liberty Financial Sues Justin Sun for Defamation After Token Freeze Dispute

World Liberty Financial (WLFI), a cryptocurrency venture associated with former U.S. President Donald Trump, has filed a defamation lawsuit against advisor Justin Sun. The company alleges Sun launched a coordinated media smear campaign after WLFI froze the majority of his WLFI tokens on September 1, 2025.

In a statement posted on X (formerly Twitter) on May 4, 2026, WLFI announced the legal action, asserting claims of defamation and defamation by implication. The project seeks damages and a court-ordered retraction.

"Today, we are filing a lawsuit against Justin Sun for defamation. Sun has launched a coordinated media smear campaign against World Liberty Financial and refused to stop even when confronted with the truth."
— WLFI (@worldlibertyfi)

Sun responded to the lawsuit, calling it a ‘meritless PR stunt’.

Background: The Token Freeze and Prior Legal Action

Sun’s frustration with WLFI stems from the freezing of his WLFI tokens, which occurred on September 1, 2025. The freeze affected the vast majority of his holdings, prompting Sun to take legal action of his own.

On April 21, 2026, Sun and his companies Blue Anthem Limited and Black Anthem Limited filed a complaint in the Northern District of California. In that lawsuit, Sun alleged that WLFI breached its contract after his entities paid $45 million for 4 billion WLFI tokens, including advisory tokens. He claimed the tokens lost value due to WLFI’s alleged misconduct, including the use of undisclosed blacklisting powers to freeze his holdings.

Sun’s complaint further alleged that WLFI disabled his governance rights, preventing him from voting on proposals affecting token holders. He sought a financial remedy for what he described as ‘egregious misconduct, including breaches of contract, fraud, and conversion.’

World Liberty Financial’s Countersuit: Allegations of Improper Conduct

WLFI’s lawsuit against Sun presents a contrasting narrative. The company claims Sun’s entities violated transfer rules by engaging in straw purchases—buying tokens for undisclosed third parties—and later betting against the price of WLFI. It also alleges Sun attempted to publicly discredit WLFI after his tokens were frozen.

WLFI maintains that its right to freeze Sun’s tokens was clearly outlined in sale documents, Sun’s unlock contract, and on-chain code. The company has not provided further details on the redacted sections of its lawsuit.

Public Feud and Financial Impact

Despite his restricted holdings, Sun, who remains a nominal advisor to WLFI, has publicly engaged in a prolonged dispute with the WLFI team on X (formerly Twitter) over the past several months.

According to reports, Sun’s blacklisted WLFI tokens have lost $70 million in value since the freeze in September 2025. Sun had previously threatened to bring a defamation suit against WLFI in response to their actions.