Trump-Backed Crypto Firm Accuses Justin Sun of Smear Campaign
On Wednesday, May 6, 2026, Fox News reported that World Liberty Financial (WLFI), a cryptocurrency firm backed by the Trump and Witkoff families, accused Justin Sun, a crypto billionaire and one of their investors, of orchestrating a smear campaign against the company. The firm alleges that Sun’s actions were intended to undermine a crypto product he was reportedly betting against.
According to a press release, Tom Clare, the attorney representing World Liberty Financial, stated that the lawsuit was filed as a last resort to correct the record and protect the interests of token holders, employees, and stakeholders. Clare added, “We are eager to expose the falsity of Sun’s statements in court and in public.”
Sun, who is also the founder of the TRON blockchain platform, initially announced a $30 million investment in WLFI in November 2024, identifying himself as the company’s largest backer. In a post on X, Sun wrote, “We are thrilled to invest $30 million in World Liberty Financial as its largest investor. The U.S. is becoming the blockchain hub and Bitcoin owes it to [President Donald Trump]”.
However, two years later, WLFI is accusing Sun of violating his investor agreement by shorting WLFI’s token, a move that allegedly allowed him to profit if the company’s value declined. In response, World Liberty Financial froze Sun’s assets. Sun then allegedly threatened to publicly criticize the company to his millions of online followers if his assets were not unfrozen.
Zach Witkoff, son of Trump’s Special Envoy to the Middle East Steve Witkoff, posted on X that “Justin Sun engaged in a defamatory campaign to torch World Liberty Financial’s reputation.” He further claimed that Sun’s statements were false and intended to harm WLFI token holders.
Eric and Donald Trump Jr. also used X to support their company’s claims, accusing Sun of conducting “a coordinated media smear campaign against World Liberty Financial” and stated that he “refused to stop even when confronted with the truth.”
WLFI also claims that Sun had previously praised the company online, calling it “one of the biggest and most important projects in crypto” and stating that he was “fully aligned with the mission.” After WLFI refused to unfreeze his assets, Sun allegedly criticized the company’s business practices and leadership, advising viewers to avoid the organization. The lawsuit also alleges that Sun used fake social media “bot” accounts to amplify his claims.
In a post that received over 2 million views, Sun asserted that WLFI had implemented a feature that allowed them to seize users’ digital assets. Sun stated, “This feature grants the company unilateral power to freeze, restrict, or effectively confiscate the property rights of any token holder—without notice, without reason and without any avenue for recourse.”
Sun has pointed to his own digital assets as evidence to support his claims. He stated, “The WLFI team’s conduct is eroding the community’s trust in the project. Unlock the tokens and uphold transparency to the community. Let us build with integrity, not with malfeasance.”
The article also notes that the U.S. Securities and Exchange Commission (SEC) had previously accused Sun of selling unregistered securities, manipulating the market, and paying celebrities to promote his products without proper disclosures. Sun reached a settlement with the SEC for $10 million earlier this year, although he denied any wrongdoing.
Source: Fox News
