Cryptocurrency billionaire Justin Sun has sued World Liberty Financial, a digital currency venture co-founded by President Donald Trump and his sons, alleging fraud and illegal freezing of his tokens worth up to $billion. The lawsuit, filed on Tuesday in California federal court, accuses the company of trying to pressure Sun into investing hundreds of millions of dollars and secretly changing contractual rules to give itself 'blacklisting power' over token transfers.
Key Takeaways
Cryptocurrency billionaire Justin Sun has sued World Liberty Financial, a digital currency venture co-founded by President Donald Trump and his sons, alleging fraud and illegal freezing of his tokens worth up to $1 billion. The lawsuit claims the company tried to pressure Sun into investing more money and secretly changed contractual rules to gain control over token transfers.
- Justin Sun filed a lawsuit in California federal court against World Liberty Financial
- Allegations include fraud, extortion, and illegal freezing of tokens worth up to $1 billion
- Sun claims the company threatened to permanently delete his holdings
- World Liberty Financial denies wrongdoing and plans to vigorously defend against the lawsuit
- The dispute raises concerns about the company's practices and transparency
Sun alleged that World Liberty Financial froze his tokens after he refused to commit more money to the business. He also claimed that the company threatened to permanently delete his holdings, a process known as 'burning.' Sun described himself as one of World Liberty's anchor investors and an ardent supporter of President Trump.
In a post on X, Sun stated, "Unfortunately, certain individuals on the World Liberty project team have been operating the project in a manner that goes against President Trump's values. They wrongfully froze all of my tokens, stripped me of my right to vote on governance proposals and have threatened to permanently destroy my tokens by 'burning' them -- all without any proper justification."
World Liberty Financial co-founder and CEO Zach Witkoff dismissed Sun's allegations as entirely meritless. According to CBS News, Witkoff wrote on social media that Sun engaged in misconduct requiring World Liberty to take action to protect itself and its users. The company plans to defend against the lawsuit vigorously.
The dispute threatens Sun's relationship with President Trump, whom he has supported for years. Sun revealed last year that he was the largest holder of another Trump-backed crypto token, dubbed $TRUMP. Despite the legal action, Sun maintains his support for Trump and blames certain individuals associated with World Liberty for the alleged issues.
Investors have grown concerned about World Liberty's practices, including borrowing against the value of its tokens and a lack of transparency. The Securities and Exchange Commission has dropped its investigation into Sun, but questions remain about his investments in Trump's crypto ventures. The lawsuit caps a dramatic deterioration of relations between Sun and World Liberty.
In his complaint, Sun said promises to give token-holders the option to trade the currency in future "were false and misleading." The tokens did become tradable, but Sun said World Liberty blocked him from selling them. A single WLFI token is worth 8 cents, down from 31 cents since September.
Eric Trump responded to the lawsuit by saying, "The only thing more ridiculous than this lawsuit is spending $6 million on a banana duct-taped to a wall." Sun previously bought and ate an art piece by Maurizio Cattelan.
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