World Liberty Financial (WLFI) filed a defamation lawsuit against Tron founder Justin Sun on Monday, accusing him of running a paid smear campaign to crash the value of the WLFI token. The complaint, lodged in the Eleventh Judicial Circuit Court for Miami-Dade County, Florida, seeks unspecified damages and a public retraction from Sun.
The Allegations: A Smear Campaign
WLFI claims Sun used press outlets, social media influencers, and automated bots to spread negative information about the project. According to the lawsuit, this coordinated effort was designed to drive down the token's price. Despite the legal action, WLFI's token traded near $0.06 on Monday, up nearly 12% in the last 24 hours.
The Dispute Over Frozen Tokens
The fight traces back to September 2025, when WLFI froze wallets linked to Sun. The move locked 540 million unlocked tokens and 2.4 billion locked WLFI. WLFI says it acted because Sun's investment vehicle, Blue Anthem, transferred tokens to Binance in violation of his investor agreement. Sun initially invested $30 million in WLFI, later raising his stake to roughly $75 million.
Sun fired back in late April, filing his own lawsuit in California federal court that alleges fraud and breach of contract. The two sides disagree on whether WLFI's freeze authority was clearly disclosed. WLFI insists the terms appeared in its Terms of Sale and purchase agreements. Sun argues the company used a hidden blacklist function. Since the freeze became public, the WLFI token has dropped more than 75% from its all-time high.
Sun's Response
Sun dismissed the latest lawsuit as a “meritless PR stunt” in a statement, adding he looks forward to defeating the case in court. The California lawsuit remains pending, and the Miami-Dade case is just getting started. For now, the token's price has recovered some ground, but the question of who will prevail in court — and what it means for WLFI's future — is far from settled.
