World Liberty Financial, a cryptocurrency venture co-founded by former U.S. President Donald Trump and his sons, has initiated a defamation lawsuit against Justin Sun, a prominent crypto entrepreneur based in Hong Kong. The lawsuit, filed in Florida state court, accuses Sun of conducting a 'public smear campaign' and improperly transferring WLFI tokens, which grant voting and governance rights, to the crypto exchange Binance. Additionally, the lawsuit claims that Sun engaged in short selling, betting against the WLFI token's value as public trading commenced in September 2025. Zach Witkoff, CEO of World Liberty, stated that Sun's actions were intended to damage the reputation of World Liberty Financial and harm its token holders. Sun, in response, dismissed the lawsuit as a 'meritless PR stunt' and expressed confidence in winning the case in court. This legal dispute marks a significant shift in the relationship between Sun and World Liberty, which had previously benefited from Sun's early investment of $45 million and advisory role. Following the announcement of the lawsuit, World Liberty's token saw a 12% increase but remains down approximately 72% since its trading debut. Sun's stake of 4 billion tokens is currently valued at about $264 million.