Justin Sun’s Lawsuit Against WLF: Four 'Absurd' Details Surface

Original author: Aleks Gilbert

Original translation: Chopper, Foresight News

Cryptocurrency billionaire Justin Sun hopes to maintain a good relationship with Donald Trump, but has taken a hardline approach against the president's business associates.

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

The accusations were 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 directed the most damaging content at one person: World Liberty co-founder Chase Herro, whom the complaint describes as a habitual con artist and tax evader.

Some details have been previously reported. Contentions such as World Liberty's imminent collapse are speculative. Even so, the lawsuit provides ample ammunition for the company's critics, including disgruntled investors and opportunistic opposition lawmakers.

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

Company 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 often a mix of success and failure, 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

Previous mainstream media reports have covered Herro's tainted history, including a prison record, inflammatory statements, dubious business dealings, and involvement in a DeFi protocol in 2024 that lost nearly all its crypto assets due to a hack.

The complaint incorporates all of this and adds several new details.

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

The website was inaccessible on Thursday, and DL News could not verify whether the site contained the content alleged in Sun's complaint.

The complaint states that Herro has been subject to four tax liens filed by courts and that a property he owns in Florida was the subject of a tax deed.

The complaint also alleges that Herro "publicly bragged" about visiting Little St. James Island, the private island belonging to disgraced financier Jeffrey Epstein. However, the complaint provides no evidence of this statement, and DL News could not immediately verify whether Herro had made such remarks.

"Secret" Upgrades

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

According to company documents, token holders have no say in World Liberty Financial's operations but can vote on updates to the underlying technology.

Justin Sun alleges that World Liberty executives broke their promises, unilaterally completing two technology upgrades last year without any governance vote or disclosure to WLFI holders.

These upgrades allegedly granted World Liberty Financial the ability to freeze and confiscate WLFI tokens, a power that has been used against Sun. Sun described these upgrades as devastating.

"Although these upgrades are visible on the public blockchain, World Liberty Financial hid them deep within the code, failing to inform token holders of the function's existence and its potential impact," the complaint reads. "The company secretly added a 'blacklist' function that could be activated at will."

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

Witkoff said in a statement: "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 protect the community ecosystem."

TRUMP Meme Coin

World Liberty Financial has been vague about the specifics of Justin Sun's alleged misconduct. However, Sun stated that company executives provided a detailed explanation in private.

The reasons include: executives determined that Sun sold tokens causing a 40% drop in the WLFI price, purchased tokens on behalf of others in violation of rules, and breached a "Token Purchase Agreement."

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

"World Liberty Financial claimed that one reason for freezing the WLFI tokens was displeasure over Sun's purchase of $100 million worth of TRUMP tokens (issued by another Trump-endorsed project)," the complaint reads. 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's purchase of TRUMP coins.

Unlicensed Money Transmission

Last year, two crypto developers were sentenced to prison for operating an unlicensed money transmission business, and another was convicted on the same charge but has not yet been sentenced.

Justin Sun alleges that World Liberty Financial has also violated this regulation.

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

"World Liberty's highly centralized control over WLFI tokens is not only completely antithetical to the principles of DeFi, but also indicates that it is engaging in money transmission without registration or a license, in violation of multiple U.S. federal and state criminal laws."