Key PointsThe Trump family’s crypto platform, World Liberty Financial, filed a defamation lawsuit against Justin Sun this weekThe company alleges Sun engaged in short selling of WLFI tokens and made unauthorized purchases through proxy entitiesSun previously filed his own lawsuit in April against World Liberty, alleging improper freezing of his token holdingsAccording to World Liberty, Sun initiated a “public smear campaign” on social media after the company declined to restore access to his frozen assetsSun’s total investment in World Liberty reached approximately $75 million in 2024, which included purchases of the TRUMP meme coinThe cryptocurrency platform World Liberty Financial, co-established by President Donald Trump alongside his family members, has initiated federal legal proceedings against crypto billionaire Justin Sun, alleging defamation and improper token activity.World Liberty Financial said it's suing Justin Sun for defamation, accusing the billionaire crypto entrepreneur of running a coordinated media campaign against the Trump-linked project https://t.co/1iVzGzbC7e— Bloomberg (@business) May 4, 2026The complaint was submitted to federal court on Monday. This legal move comes after Sun filed his own lawsuit against World Liberty this past April, claiming the platform illegally restricted access to his tokens and stripped him of governance voting privileges.Sun made his initial $30 million commitment to World Liberty Financial in November 2024. This capital injection provided crucial support to the platform’s operations and helped fund day-to-day expenses. Subsequently, he contributed an additional $45 million or more, pushing his aggregate investment to roughly $75 million.World Liberty Financial now contends that Sun, despite being a major stakeholder, participated in short selling activities targeting its WLFI tokens with the intention of depressing market prices. The platform further accuses him of conducting straw purchases—essentially buying WLFI tokens through his controlled entities on behalf of undisclosed third-party investors.Following World Liberty‘s decision to lock Sun’s token holdings due to these purported infractions, Sun allegedly requested immediate restoration of access. When the platform rejected his demands, World Liberty claims Sun escalated the matter through public channels.Social Media BacklashSun posted on X in April, sarcastically renaming World Liberty as “World Tyranny.” He labeled company leadership as “bad actors” and characterized the token freeze as “illegitimate and were never authorized by any fair, transparent, or good-faith community governance process.”World Liberty Financial maintains these public statements were both inaccurate and harmful. The lawsuit asserts that Sun’s comments damaged the platform’s standing in the industry and resulted in lost business partnerships and investment opportunities.World Liberty contends its authority to freeze tokens was clearly disclosed in public documentation and formed part of its original contractual arrangements with Sun.Ongoing LitigationSun’s April legal filing remains active in the courts. His lawsuit seeks a jury trial, financial compensation, and the immediate unlocking of his WLFI token holdings.World Liberty Financial’s newly filed defamation case similarly requests a jury trial along with damages in an amount yet to be specified. Legal experts anticipate both proceedings could extend for months or potentially years before reaching final resolution.As of Monday, Sun’s legal representation had not issued a statement or response to media inquiries regarding the defamation allegations.Sun established the Tron blockchain network in 2017 and remains its primary architect. According to Forbes’ latest wealth calculations, his personal fortune stands at $8.5 billion, placing him at position 412 on the publication’s worldwide billionaires ranking.World Liberty Financial commenced operations in 2024. The platform markets itself as a decentralized finance ecosystem championed by Donald Trump. The venture counts Eric Trump, Donald Trump Jr., and Barron Trump among its founding team members.The Securities and Exchange Commission had previously conducted an investigation into Sun regarding potential securities fraud violations. That matter was ultimately resolved through settlement, and additional regulatory probes into cryptocurrency platforms associated with Sun have since been discontinued.The post Trump Family’s Crypto Firm Files Defamation Lawsuit Against Justin Sun appeared first on Blockonomi.