Trump-Linked Crypto Firm Sues Investor Justin Sun for Alleged Smear Campaign and Short Selling

World Liberty Financial (WLFI), the Trump family-backed cryptocurrency firm, is suing Justin Sun, the billionaire founder of the TRON blockchain, alleging he launched a deliberate smear campaign to tank WLFI’s token price while violating his investor agreement by short-selling the asset.

Sun, who invested $30 million in WLFI in November 2024 and once hailed the company as a key player in the crypto space, is now accused of betraying the firm. According to WLFI’s attorney Tom Clare, Sun “chose to defame World Liberty — repeatedly, publicly and to millions of followers,” forcing the company to file suit to “correct the record” and protect stakeholders.

The drama escalated after WLFI froze Sun’s assets upon discovering his short position, which would profit from the company’s decline. Sun allegedly responded by threatening to publicly criticize WLFI unless his holdings were unfrozen. When the company refused, Sun unleashed a wave of online attacks, accusing WLFI of building a feature that lets it freeze or confiscate users’ digital assets without warning or recourse.

Sun’s accusations, which he amplified to millions of followers and allegedly boosted with fake social media bots, claim WLFI has “unilateral power to freeze, restrict, or effectively confiscate the property rights of any token holder.” He warned the community to “stay away” from the project, citing erosion of trust due to WLFI’s opaque practices.

Zach Witkoff, son of Trump’s Middle East envoy Steve Witkoff and a WLFI spokesperson, fired back on social media, calling Sun’s claims “false” and part of a “defamatory campaign” designed to harm token holders. Donald Trump Jr. and Eric Trump also joined the chorus, accusing Sun of orchestrating a “coordinated media smear campaign” and refusing to stop “even when confronted with the truth.”

This legal battle adds another layer to the long shadow of corruption and self-dealing surrounding the Trump family’s crypto ventures. WLFI’s ties to the Trump and Witkoff families have raised eyebrows amid broader concerns about pay-to-play schemes and unregulated financial dealings leveraging presidential influence.

Justin Sun himself is no stranger to controversy. The U.S. Securities and Exchange Commission (SEC) accused him earlier this year of selling unregistered securities, market manipulation, and paying celebrities to promote his products without proper disclosures. Sun settled with the SEC for $10 million but denied wrongdoing.

As the WLFI lawsuit unfolds, it spotlights the chaotic and often shady world of Trump-linked crypto enterprises — where insider deals, investor betrayals, and public smear campaigns play out in full view, leaving ordinary investors caught in the crossfire. The court battle promises to expose more about how the Trump family’s crypto ambitions have operated in the shadows, using influence and intimidation to shield their interests.

We will continue to follow this story as it develops, holding these powerful players accountable for their actions in the volatile crypto market.