World Liberty Financial (WLFI), the crypto venture cofounded by President Donald Trump’s sons, filed a defamation lawsuit Monday against the Hong Kong-based crypto entrepreneur Justin Sun, stating that Sun is engaging in a “scorched-earth pressure campaign against World Liberty to try to extract hundreds of millions of dollars from World Liberty.”
World Liberty Financial has filed a defamation lawsuit against Yuchen (Justin) Sun, a Chinese-born billionaire and founder of the TRON blockchain. This follows as Sun sued World Liberty on April 21 for alleged fraud.
Sun claimed in his suit that World Liberty attempted to pressure him into investing “hundreds of millions of dollars” into its USD1 stablecoin. He said that when he did not invest, World Liberty froze his holdings in retaliation.
On the obverse side, World Liberty said that Sun has orchestrated a “smear campaign” against the company and that Sun violated his investment terms.
In response to World Liberty’s defamation suit, Sun wrote on X, “The alleged defamation lawsuit that World Liberty announced on X today is nothing more than a meritless PR stunt. I stand by my actions and look forward to defeating the case in court.”
“Justin Sun is playing the victim, and nobody who knows anything about this guy’s history will have an ounce of sympathy for him. Justin is a billionaire who had to pay the SEC $10 million in fines. Apparently he was shorting WLFI stock and making straw purchases, and when he got caught, he decided to wage lawfare against the Trump family. Now that they’re fighting back, he’s crying to the liberal media. It’s pathetic,” a Trump ally told Breitbart News in a written statement.
The lawsuit alleges that Sun engaged in prohibited transfers, straw purchases, or purchases for someone else, and short sales of $WLFI, the World Liberty Financial digital token.
Tom Clare, attorney for World Liberty Financial, said:
Rather than acting in good faith, Justin Sun chose to defame W:orld Liberty — repeatedly, publicly, and to millions of followers. World Liberty filed this lawsuit as a last resort to correct the record and to protect its token holders, its employees, and all its stakeholders. We are eager to expose the falsity of Sun’s statements in court and in public.
The lawsuit against Sun alleges that Sun made these statements despite knowing WLFI’s governing agreements and public disclosures.
The complaint alleges:
- Sun is suspected of improper transfers, conducting straw purchases, and short selling $WLFI tokens. The lawsuit alleges Sun bought $WLFI tokens for undisclosed individuals through straw purchases and conducted unauthorized token transfers and short sales of $WLFI tokens.
- World Liberty froze $WLFI tokens held by Blue Anthem, Justin Sun’s entity, stating it did so to protect World Liberty and the community of $WLFI token holders. World Liberty said that Justin chose to embark on a “scorched-earth pressure campaign against World Liberty to try to extract hundreds of millions of dollars from World Liberty” rather than “work constructively with World Liberty” to address the misconduct. World Liberty said that Sun’s counsel threatened litigation designed to “light World Liberty on fire” and cause the $WLFI token price to “go to shit.”
- The lawsuit states that when World Liberty did not accede to Sun’s demands, he launched a “public smear campaign.”
- Sun has previously praised World Liberty as “one of the biggest and most important projects in crypto” and said he was “fully aligned with the mission.”
Sun wrote in September about his excitement for the World Liberty project:
Excited to share my thoughts on $WLFI — I truly believe this will be one of the biggest and most important projects in crypto. We have no plans to sell our unlocked tokens anytime soon. The long-term vision here is too powerful, and I’m fully aligned with the mission. Also, to celebrate the incredible launch of the token, we are committed to increasing the total circulation of #USD1 on #TRON to $200mil. The future of finance is being built right here. LFG!
The World Liberty filing stated that Sun has had many “legitimate” avenues to contest the freezing of his $WLFI tokens. Instead, the lawsuit argues, Sun chose to “wage a public campaign of false and defamatory attacks against World Liberty.”
In March, Sun reached a $10 million settlement to resolve a 2023 Securities and Exchange (SEC) lawsuit that claimed Sun and his companies, Tron Foundation, BitTorrent Foundation, and Rainberrry, schemed to illegally distribute crypto assets Tronix and BitTorrent to artificially inflate trading volume and conceal payments to celebrity endorsers.
He was also accused of illegally generating $31 million of proceeds by ordering employees to conduct hundreds of thousands of Tronix trades between two accounts he controlled, creating a false and misleading sense of legitimate trading. He was accused of retaining celebrities such as Lindsey Lohan, Akon, Ne-Yo0, and Jake Paul to promote Tronix and BitTorrent, while failing to disclose that they were paid for their endorsements.
Investigative journalist Laura Loomer claimed on X:
This is the same Justin Sun (founder of the Tron blockchain) with deep, longstanding ties to the Chinese Communist Party, from blockchain research at the CCP’s Central Party School and reported involvement in state-sanctioned blockchain projects, to holding several positions that help advance CCP influence. Justin Sun also has ties to the CCP through publishing on official CCP platforms, and alleged personal connections to Chinese government officials. Given @worldlibertyfi WLFI’s close connections to President Trump and the Witkoff family (with Zach Witkoff @ZachWitkoff as CEO and his father Steve @SteveWitkoff serving as President Trump’s Middle East envoy), the lawsuit and timing of this feud raises serious questions:
Could Sun’s aggressive legal and public assault against WLFI be a targeted CCP operation designed to damage Trump’s inner circle, undermine a major pro-American crypto venture, and create chaos around key Trump allies during the Iran War negotiations and generate chaotic news cycles months before the midterm elections? How is someone with these deep CCP links and associations freely operating in the United States, pouring tens of millions of dollars into American crypto projects, filing lawsuits in our courts, and influencing our financial markets?
Even members of Congress have written to the SEC expressing their concerns over Justin Sun’s affiliation with the CCP. This is very alarming and it reeks of being a possible foreign influence operation to undermine the Witkoff and Trump families.
Jack Posobiec wrote, “Seems like there’s collusion between Sun and the leftwing media to try and damage the Trump and Witkoff families. TDS!”
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