World Liberty Financial filed a defamation lawsuit against crypto investor Justin Sun on May 5, accusing him of spreading false statements that harmed the project's reputation following a token freeze dispute. The legal clash has intensified as both sides pursue separate cases.
Token Freeze Sparks Legal Battle
The dispute stems from WLFI's decision to freeze tokens linked to Sun's entities. WLFI said it acted within its terms to protect the ecosystem after Sun's entity Blue Anthem purchased tokens in November 2024 and later engaged in prohibited transfers, including to Binance. Sun challenged the freeze by filing his own lawsuit in April, alleging WLFI restricted his governance rights and blocked access to his holdings.
WLFI Accuses Sun of Smear Campaign
In the latest suit, WLFI claimed Sun launched a public campaign against the project, calling its governance a scam and questioning its structure. The company alleged Sun used influencers and automated accounts to amplify false claims, targeting WLFI's reputation and token value. WLFI stressed that the freeze mechanism was disclosed in its agreements and denied any hidden controls. It also said Sun escalated the dispute through media and social platforms instead of seeking a private resolution.
Sun Denies Allegations, Calls Lawsuit a PR Move
Justin Sun dismissed the defamation lawsuit as baseless and a publicity stunt. He said he will fight the claims in court. Both sides now seek damages and jury trials: WLFI aims to hold Sun accountable for defamation, while Sun demands restoration of his token access. The outcome remains uncertain as the legal proceedings unfold.