World Liberty Fires Back at Justin Sun with 'Misconduct' Allegations, Dismisses Billion-Dollar Lawsuit

The Trump-family-backed DeFi platform World Liberty Financial has responded to Justin Sun's defamation lawsuit by accusing the Tron founder of unspecified misconduct, while company co-founder Eric Trump mocked the legal action by comparing it to a $6 million duct-taped banana.

Sun initiated legal proceedings on Monday in the Northern District of California, claiming that World Liberty Financial unlawfully froze approximately four billion WLFI tokens valued at roughly $1 billion. The company's informal response came on Tuesday, with co-founder Zach Witkoff dismissing the case as a "desperate" distraction and pledging continued commitment to user protection.

Vague Accusations and Missing Details

While World Liberty executives have publicly accused Sun of misconduct, neither Witkoff nor Eric Trump elaborated on the specifics of these allegations. A company representative declined further comment, directing media inquiries to the social media posts published by the co-founders.

However, Sun's complaint provides greater clarity on the accusations leveled against him during private communications. According to the filing, World Liberty has made multiple claims against the Tron founder, all of which Sun characterizes as unsubstantiated.

The Disputed Claims

The allegations detailed in Sun's lawsuit include:

• Responsibility for a 40% price decline in WLFI tokens on September 1, 2025, the date trading commenced
• Market manipulation through short-selling perpetual futures contracts on centralized exchanges—a charge Sun argues would be logistically impossible given his token transfers occurred hours after the sharpest price drop
• Acting as a straw purchaser for other investors in violation of his token agreement
• Executing prohibited transfers to cryptocurrency exchanges HTX and Binance
• Submitting inadequate know-your-customer (KYC) documentation

Regarding his $100 million acquisition of TRUMP tokens from another Trump-backed project, Sun contended that the purchase received approval from a Trump family member serving as a partner in both ventures.

KYC Threats and Escalation

The complaint further alleges that on September 25, 2025, World Liberty executive Mr. Herro threatened repeatedly to report Sun to U.S. criminal authorities over unspecified KYC concerns. Sun's filing emphasizes that World Liberty has refused to provide detailed explanations regarding these issues despite multiple requests for clarification.

World Liberty Financial has not yet filed a formal court response to Sun's lawsuit.