World Liberty Financial, the crypto venture co-founded by President Donald Trump and his sons, has filed a defamation lawsuit in Florida state court against Hong Kong-based crypto entrepreneur Justin Sun. The company accuses Sun of launching a "public smear campaign," improperly transferring his WLFI governance tokens to Binance, and short-selling the token.
The lawsuit alleges Sun engaged in a coordinated effort to drive down the token's price as public trading began in September.
"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," said Zach Witkoff, World Liberty's CEO.
Sun called the lawsuit a "meritless PR stunt" and said he looks forward to defeating it in court.
The legal battle marks a sharp reversal. Sun was an early backer, buying $45 million in tokens and serving as an adviser. Eric Trump once called him "a great friend and an icon in the crypto space."
WLFI tokens rallied 12% after the lawsuit news but remain down 72% since trading began. Sun's 4 billion token stake is currently worth about $264 million.