Billionaire investor files: Billionaire investor Justin Sun has filed a lawsuit against the Trump family’s cryptocurrency venture, World Liberty Financial, alleging extortion and an illegal scheme to seize his WLFI tokens. Sun claims to have invested $45 million in the company’s tokens, which he asserts have been unfairly frozen, stripping him of his voting rights on governance issues.
Billionaire investor files: what to know
Allegations of Misconduct
In his complaint, filed in a San Francisco federal court, Sun accuses World Liberty of blocking him from trading his tokens and threatening to permanently destroy them by “burning” them. He alleges that the initial promises made by the company regarding the ability to trade the currency were false and misleading. Sun stated that at times, his WLFI tokens were valued at over $1 billion, but the price has since dropped significantly, from 31 cents to just under 8 cents.
Sun, who is also the founder of the multi-billion dollar crypto project TRON, expressed that his investment was motivated by the Trump family’s association with the project and his support for cryptocurrencies. He has previously invested $100 million in Trump’s meme coins.
Responses from World Liberty
World Liberty has denied any wrongdoing, with co-founder Zach Witkoff describing Sun’s lawsuit as a “desperate attempt” to deflect attention from his own alleged misconduct. Witkoff stated that Sun’s claims are meritless and that the company is prepared to have the case dismissed. Eric Trump also commented on the lawsuit, suggesting that it is as absurd as Sun’s previous purchase of an artwork consisting of a banana duct-taped to a wall.
Sun’s allegations include claims that certain individuals associated with World Liberty are leveraging the Trump brand for fraudulent purposes. He has expressed concern over the company’s borrowing against the value of its tokens, which has raised alarms among investors.
Regulatory Context
In a related development, the Securities and Exchange Commission has dropped its investigation into Sun, although Senator Elizabeth Warren has raised questions about whether this decision is connected to his investments in Trump’s crypto ventures. Sun had faced scrutiny for allegedly paying influencers to promote his companies on social media without disclosing these payments.
Additionally, the Trump business behind the Truth Social platform has recently replaced its chief executive, Devin Nunes, following a significant decline in its share price. Kevin McGurn will temporarily take over leadership as the company seeks to recover from a nearly two-thirds drop in share value over the past year.