In a recent lawsuit, Justin Sun alleges that the crypto venture backed by Donald Trump, World Liberty Financial, threatened to obliterate his WLFI tokens and report him to U.S. authorities in an extortion attempt. After World Liberty blacklisted four billion WLFI tokens purchased by Sun in September, co-founder Chase Herro reportedly demanded that Sun voluntarily remove his holdings from circulation as part of a coercive ultimatum, according to a 52-page complaint filed on Tuesday.
Herro allegedly warned Sun that the decentralized finance project would prompt holders to vote for erasing Sun’s significant investment if he refused. Given the substantial control World Liberty’s leadership had over WLFI in circulation, such a decision was likely assured. While the company hasn’t explicitly explained why Sun’s tokens were frozen, the lawsuit suggests this was an attempt to pressure Sun into investing more capital.
The complaint contains redacted sections, indicating that the full extent of the disagreement isn’t yet clear from Sun’s perspective. Responding to the lawsuit, Eric Trump dismissed it as absurd in a post on X, referencing Sun’s $6 million purchase of a banana art piece in November 2024. Zach Witkoff, World Liberty co-founder and son of U.S. President Donald Trump’s Middle East envoy Steve Witkoff, stated on X that the case lacks merit and will be dismissed quickly.
Decrypht has sought comments from both parties involved. Prior to Sun settling a three-year legal dispute with the SEC involving a $10 million penalty over corruption concerns, Herro allegedly threatened to report him for unspecified KYC issues. In September, Sun contended that World Liberty tried to inflate WLFI’s price by preventing a major holder from selling and affecting its market value.
Sun’s $45 million investment in World Liberty remains blocked, with his tokens valued at approximately $318 million as per CoinGecko, trading around $0.08 on Wednesday. He accused World Liberty of wrongly blaming him for a 40% drop in WLFI’s price within a day and alleged accusations of short-selling the token along with unfavorable investments.
The lawsuit also claims that Sun faced ire from World Liberty after purchasing $100 million worth of an officially licensed meme coin launched by Trump just before his second term. However, Sun asserts this purchase was pre-approved by a member of the Trump family. This approval might indicate access to Trump’s inner circle for Sun, especially as the DeFi project had previously granted guaranteed access to its team for top WLFI backers.
The public dispute intensified recently when Sun accused World Liberty of misconduct and exploiting the crypto community as a personal ATM through substantial stablecoin loans. He stated that resolving his concerns would involve unlocking his tokens and revealing smart contract operators. In response, World Liberty on X called Sun’s accusations baseless and invited him to court.