Trump Family Crypto Scheme World Liberty Financial Sues Backer Justin Sun for ‘Smear Campaign’

World Liberty Financial, the crypto project co-founded by former President Donald Trump and his sons, has fired back at one of its biggest early backers, Hong Kong crypto billionaire Justin Sun, with a defamation lawsuit filed in Florida state court. The lawsuit accuses Sun of orchestrating a “public smear campaign” against the venture by improperly transferring WLFI tokens with voting rights to Binance and engaging in short-selling bets designed to drive the token’s market price down as it went public in September 2025.

According to World Liberty’s CEO Zach Witkoff, Sun knowingly spread false claims to harm WLFI token holders and damage the project’s reputation. “Justin Sun engaged in a defamatory campaign to torch World Liberty Financial’s reputation,” Witkoff said in a statement posted on X (formerly Twitter).

Sun, however, dismissed the lawsuit as a “meritless PR stunt” and vowed to fight it in court. This legal tit-for-tat follows Sun’s earlier suit against World Liberty, where he alleged the company illegally froze tokens he purchased and secretly blocked their sale after public trading began. World Liberty counters that the token freeze rights were clearly disclosed in the Terms of Sale.

This bitter feud marks a dramatic fall from grace for Sun, who was once a key figure in the Trump family’s crypto ambitions. Sun bought $45 million worth of WLFI tokens in late 2024 and early 2025 and was named an adviser to the project. Eric Trump hailed Sun as “a great friend and an icon in the crypto space” as recently as June 2025. Sun even predicted WLFI would become “one of the biggest and most important projects in crypto” when the token launched publicly.

Yet, since trading began, WLFI’s token has plummeted about 72%, despite a 12% rally after the lawsuit news. Sun’s remaining 4 billion tokens are valued at roughly $264 million, a far cry from earlier optimism.

World Liberty Financial stands as the most prominent of several crypto ventures tied to the Trump family, which has reportedly made over $1 billion from WLFI token sales so far. The company’s bylaws allocate 75% of revenue from token sales directly to the Trumps, underscoring how the presidency and family fortune have been weaponized to cash in on unregulated crypto markets.

This ongoing legal battle highlights the toxic mix of political power, unchecked financial schemes, and the opaque world of crypto tokens. It raises urgent questions about accountability and transparency when former presidents and their families exploit emerging technologies to enrich themselves — often at the expense of ordinary investors.

We will continue to track this story as it unfolds, exposing the corruption and grift lurking behind the Trump family’s crypto empire.