Trump Family Crypto Scheme Fires Back at Billionaire Backer Accusing Him of Smear

World Liberty Financial, the crypto project co-founded by former President Donald Trump and his sons, is escalating a bitter dispute with one of its own top backers, Hong Kong-based crypto entrepreneur Justin Sun. On Monday, the company filed a defamation lawsuit in Florida state court accusing Sun of orchestrating a “public smear campaign” aimed at tanking the WLFI token’s market value.

According to the lawsuit, Sun engaged in a series of bad-faith actions beginning as the WLFI token started public trading in September. The complaint alleges Sun improperly transferred WLFI tokens—which carry voting and governance rights—to the major crypto exchange Binance. More damagingly, World Liberty claims Sun placed short bets against the token, essentially betting on its price to fall.

Zach Witkoff, World Liberty’s CEO, publicly condemned Sun’s conduct on X (formerly Twitter), stating, “Justin Sun engaged in a defamatory campaign to torch World Liberty Financial’s reputation. He knew his claims were false and made them anyway to harm WLFI token holders.”

This legal fight exposes the murky underbelly of the Trump family’s crypto ambitions, which critics have long flagged as a pay-to-play scheme leveraging the former president’s name and political connections to enrich the family. The WLFI token has been criticized for lacking transparency and for the potential conflicts of interest inherent in a project so closely tied to a sitting or former president.

Sun, a prominent figure in the crypto world known for his aggressive deals and marketing tactics, has not publicly responded to the lawsuit as of this writing. But the accusations of market manipulation and defamation suggest that the fallout from this venture could be just beginning.

This lawsuit adds to a growing list of controversies surrounding the Trump family’s business ventures, which have repeatedly blurred the lines between private profit and public office. The WLFI case underscores the risks posed by unregulated crypto projects that exploit political influence while leaving investors vulnerable to manipulation and misinformation.

As this dispute plays out in court, it will be crucial to watch how regulators and lawmakers respond to these hybrid political-financial schemes. The Trump family’s crypto project is not just a financial gamble; it’s a test of whether democratic accountability can extend into the wild west of digital currencies and political grift.