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WLFI alleges paid smear effort after token freeze.<\/p>\n
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World Liberty Financial has announced it is suing Justin Sun for defamation, alleging that after a Sun-affiliated entity called Blue Anthem bought $WLFI tokens in November 2024 and then transferred some of them to Binance, the project froze those holdings under terms that had been \u201cclearly disclosed in the token sale documentation.\u201d<\/p>\n
WLFI says that instead of seeking a good-faith resolution, Sun responded by launching \u201ca coordinated smear campaign,\u201d allegedly paying influencers and deploying bot networks to broadcast claims to more than 4 million followers that WLFI governance is \u201ca scam\u201d and that its smart contracts contain a hidden \u201cbackdoor\u201d used to arbitrarily freeze user funds.<\/p>\n
In its statement, the project insists that the freeze function \u201cwas clearly disclosed in the sales terms,\u201d that governance is \u201ctransparent and community-driven,\u201d and that it will \u201cpursue legal action against Justin Sun\u201d to protect its reputation and token holders.<\/p>\n
The countersuit comes after Sun filed his own federal complaint in California, alleging that WLFI secretly installed a \u201cbackdoor blacklisting function\u201d in its smart contracts and used it to freeze his tokens as part of what he called an \u201cillegal asset seizure scheme.\u201d<\/p>\n
According to that complaint, Sun says WLFI blacklisted his address and froze hundreds of millions of dollars\u2019 worth of $WLFI after he refused to commit additional capital, with Reuters reporting that he accuses the Trump-family-backed venture of \u201cwrongful token freeze, fraudulent misrepresentation, defamation, and running an extortion racket.\u201d<\/p>\n
Filings cited by outlets like the Wall Street Journal and CBS News say Sun at one point controlled between 3 billion and 4 billion WLFI tokens \u2014 an investment he valued at up to $1 billion at peak \u2014 and claim that a September 2025 freeze left him unable to sell as the token dropped roughly 25% from early September levels.<\/p>\n
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WLFI has countered that it used blacklist and freeze tools to protect the community, saying in earlier statements that it had restricted tokens across 272 wallets and that some addresses were flagged for \u201cmisappropriation of other holders\u2019 funds,\u201d even as critics questioned whether those mechanisms were properly disclosed or governed.<\/p>\n
In a recent crypto.news\u00a0feature<\/a>, the broader feud was framed as a test of how far token projects can go in using on-chain control features without crossing into what major investors describe as confiscation.<\/a><\/p>\n Another crypto.news\u00a0analysis<\/a>\u00a0highlighted how the case intersects with U.S. politics, given WLFI\u2019s Trump-family backing and Sun\u2019s role as one of its largest private backers with an initial commitment of about $75 million.<\/a><\/p>\n