World Liberty Financial sues Justin Sun over frozen tokens

World Liberty Financial filed a defamation countersuit Tuesday in the Eleventh Judicial Circuit Court in Miami-Dade County, alleging Justin Sun posted false statements to about 4 million followers on X after the firm froze millions of WLFI tokens under a signed Token Unlock Agreement.

The complaint responds to a separate suit Sun filed in California, in which he alleges WLF illegally froze holdings he said were worth roughly $45 million. WLF says the freeze was a routine security step triggered by suspicious on-chain transfers, including what it describes as unauthorized moves to Binance, and that Sun was aware of the company’s contractual authority to hold tokens.

WLF alleges Sun then launched a public campaign that damaged the company’s business and reputation. The filing accuses Sun of publishing defamatory statements, making so-called “straw purchases,” executing prohibited token transfers and short selling WLFI tokens. WLF also alleges Sun demanded large cash payments it characterizes as “hush money” and declined the company’s enforcement of contractual restrictions.

Tom Clare, an attorney for World Liberty Financial, described Sun’s posts as: “Rather than acting in good faith, Justin Sun chose to defame World Liberty — repeatedly, publicly, and to millions of followers. World Liberty filed this lawsuit as a last resort to correct the record and to protect its token holders, its employees, and all its stakeholders. We are eager to expose the falsity of Sun’s statements in court and in public.” WLF is seeking compensatory damages and a court order requiring a public retraction.

The dispute also focuses on technical features of WLF’s token system. WLF says its platform includes a Regulatory Compliance Module that can blacklist wallets, a function it says complied with the 2025 Clarity Act and was disclosed to token holders. Sun contends the feature is effectively a backdoor blacklist that conflicts with the immutability expectations of many crypto users. His California filing includes fraud and defamation claims tied to WLF’s public statements.

The litigation intersects with other regulatory and political developments. In March 2026 the U.S. Securities and Exchange Commission settled a separate enforcement matter with Sun for $10 million with no admission of wrongdoing. Filings note that settlement occurred after Sun invested $75 million in WLF and purchased about $90 million in certain meme tokens; some House Democrats called for an investigation into potential pay-to-play concerns, though no formal findings have linked that activity to the WLF dispute.

The token freeze also affected internal governance at WLF. Sun was unable to vote on an April 15 governance proposal because his tokens remained frozen; the proposal would lock early investor tokens until 2030 and impose a permanent 10% burn on advisor tokens.

Both parties are pursuing claims in separate courts. The filings ask judges to resolve overlapping issues of contract law, smart-contract functionality and the legal limits on public statements by influential market participants.