- WLFI froze tokens linked to Justin Sun, citing prohibited transfers, triggering lawsuits from both parties.
- Firm accuses Sun of a smear campaign, claiming he spread false statements harming its reputation.
- Sun denies allegations and fights for token access, as both sides seek damages in ongoing legal battle.
World Liberty Financial filed a defamation lawsuit against crypto investor Justin Sun, accusing him of spreading false claims after a dispute over frozen tokens. The filing follows escalating tensions tied to Sun’s $75 million investment in WLFI. According to statements released May 5, both sides now pursue legal action as the conflict intensifies.
Token Freeze Triggers Legal Battle
The dispute centers on WLFI’s decision to freeze tokens linked to Sun’s entities. The company said it acted within its terms to protect the ecosystem. According to WLFI, Sun’s entity Blue Anthem purchased tokens in November 2024.
It later engaged in transactions the company described as prohibited, including transfers to Binance. WLFI stated that it froze the tokens after identifying these activities. However, Sun challenged the move and filed his own lawsuit in April.
He accused the company of restricting his governance rights and blocking access to his holdings. This legal clash set the stage for the current case.
WLFI Alleges Coordinated Smear Campaign
Following the freeze, WLFI accused Justin Sun of launching a public campaign against the project. The company claimed he described its governance as a scam and questioned its structure. It also alleged that Sun used influencers and automated accounts to amplify his claims.
According to WLFI, these actions targeted its reputation and token value. The firm said the freeze mechanism had been disclosed in its agreements. It rejected allegations of hidden controls or unfair governance practices.
WLFI added that Sun did not seek a private resolution before making public statements. Instead, it claims he escalated the dispute through media and social platforms.
Sun Rejects Claims As Legal Fight Expands
Justin Sun denied the allegations and dismissed the lawsuit as a publicity move. He said the claims lack merit and stated he will contest them in court. Both sides are now seeking damages and jury trials in separate cases.
WLFI aims to hold Sun accountable for defamation, while Sun seeks restoration of his tokens. The outcome remains uncertain as both lawsuits proceed through legal channels.
