WLFI Defamation Lawsuit Targets Justin Sun Over Token Freeze Claims

World Liberty Financial (WLFI) has filed a defamation lawsuit in Miami-Dade County, Florida, targeting Tron founder Justin Sun after Sun’s X posts to nearly 4 million followers. WLFI says the posts were a “deliberate campaign” of false statements intended to harm the company and WLFI token price, and it is seeking damages plus a public retraction. The dispute began in mid-April when Sun alleged WLFI embedded a “backdoor blacklisting” function in the smart contract deploying WLFI. Sun expanded the claims in court, saying WLFI froze his tokens, removed his voting rights, and threatened to burn his holdings—tying the fight to a governance and USD1 (USD1 stablecoin) support disagreement. WLFI denies wrongful blacklisting and instead argues the freeze was triggered by prohibited transfers, straw purchases, and short sales. It also says freeze authority was disclosed in WLFI’s Terms of Sale, a Token Unlock Agreement Sun signed, and publicly visible on-chain data. WLFI further alleges Sun threatened the project publicly and demanded hundreds of millions of dollars. Sun responded that the WLFI defamation lawsuit is a “meritless PR stunt” and says he will defend himself in court. For WLFI traders, the WLFI defamation lawsuit raises near-term headline and liquidity risk, with potential volatility if new filings, exchange actions, or on-chain interpretations intensify the controversy around the token-freeze narrative.