Justin Sun's Lawsuit Against WLF Files: Four "Absurd" Details Emerge

Original Author: Aleks Gilbert

Original Compiled by: Chopper, Foresight News

Crypto billionaire Justin Sun wants to maintain good relations with Donald Trump, but has taken a tough stance against the President's business partners.

In a lawsuit filed Tuesday, Sun accused World Liberty Financial executives of fraud, theft, and other misconduct.

The accusations are not couched in lengthy, dry legal jargon. Instead, the complaint emphasizes that World Liberty Financial is facing "collapse and potential bankruptcy" and is struggling to operate.

Sun aimed his most damaging allegations at one person: World Liberty co-founder Chase Herro, whom the complaint describes as a habitual fraudster and tax evader.

Some details have been reported previously. Claims such as World Liberty's imminent collapse are purely speculative. Even so, the lawsuit will provide ample ammunition for the company's critics, including disgruntled investors and opposition lawmakers lying in wait.

On Wednesday, when asked about the lawsuit, a spokesperson for World Liberty Financial pointed to a statement made on social media by the company's co-founders.

The company's CEO, Zach Witkoff, called the lawsuit "a desperate attempt by Justin Sun to divert attention from his own misconduct."

Herro did not directly respond to the lawsuit. He shared Rudyard Kipling's inspirational poem and Witkoff's statement, captioning it: "Building is never easy. It's always filled with successes and failures, like a giant maze you have to navigate."

Here are four of the most noteworthy accusations and details from the 52-page lawsuit.

Herro's Past

Mainstream media reports have previously chronicled Herro's tainted history, including a prison record, inflammatory remarks, questionable business dealings, and involvement in a 2024 DeFi protocol that lost nearly all its crypto assets due to a hack.

The complaint includes all of the above while adding several new details.

"Herro's business misconduct was so egregious that, around 2010, deceived customers and partners set up a website called ChaseHeroScam.com," the complaint reads.

The website was inaccessible on Thursday, and DL News could not verify whether it contained the content mentioned in Sun's lawsuit.

The complaint alleges that Herro was subject to four tax lien filings by courts, and a tax deed was issued for a property he owned in Florida.

The complaint also states that Herro "publicly bragged" about visiting Little St. James Island, a private island belonging to disgraced financier Jeffrey Epstein. However, the complaint does not provide evidence of this statement, and DL News could not immediately verify whether Herro made such remarks.

'Secret' Upgrades

Since the project's early stages, holders of the World Liberty Financial governance token WLFI have had limited authority.

According to company documents, token holders do not have the right to participate in World Liberty Financial's operations but can vote on upgrades to the underlying technology.

Sun accuses World Liberty executives of reneging on promises by unilaterally and quietly completing two technical upgrades last year, without any governance vote or disclosure to WLFI holders.

The upgrades allegedly granted World Liberty Financial the ability to freeze and seize WLFI tokens, a power that has since been used against Sun. Sun characterized these upgrades as devastating.

"Although the upgrade is visible on the public blockchain, World Liberty Financial hid it deep within the code, failing to inform token holders of its existence or potential impact," the complaint reads. "The company quietly added a 'blacklist' function that can be activated at will."

World Liberty Financial stated that the freeze function is only used to protect user rights.

In his statement, Witkoff said: "Justin Sun engaged in misconduct, forcing World Liberty Financial to take action to protect itself and its users. World Liberty Financial will continue to take all necessary measures to safeguard the community ecosystem."

The TRUMP Meme Coin

World Liberty Financial has been vague about the specifics of Sun's alleged misconduct. However, Sun claims company executives provided detailed explanations privately.

Reasons included executives determining that Sun sold tokens, causing WLFI's price to drop by 40%, improperly purchased tokens on behalf of others, and violated the "Token Purchase Agreement."

But the complaint suggests another trigger for the conflict: the TRUMP meme coin.

"World Liberty Financial stated that one reason for freezing the WLFI tokens was dissatisfaction with Sun purchasing $100 million worth of TRUMP tokens (issued by another Trump-endorsed project)," the complaint alleges. Part of the next sentence is redacted, but it concludes that something (likely the purchase of TRUMP tokens) "was pre-approved by a member of the Trump family, who is also a partner in both projects."

The complaint does not explain why World Liberty Financial would object to Sun buying TRUMP coins.

Money Transmission Violations

Last year, two crypto developers were sentenced to prison for operating unlicensed money transmission businesses, and another was convicted on the same charge but has yet to be sentenced.

Sun accuses World Liberty Financial of similarly violating this regulation.

The complaint argues that World Liberty Financial became a money transmitter by granting itself the power to transfer tokens on behalf of others.

"World Liberty's highly centralized control over the WLFI token is not only entirely antithetical to the principles of DeFi but also indicates it is conducting money transmission services without being registered or licensed, violating multiple U.S. federal and state criminal laws."