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Billionaire Justin Sun, who invested in a crypto project backed by President Donald Trump and his family, filed a lawsuit Tuesday in a California federal court, alleging that his multi-million dollar investment was procured through fraud and the project is now “on the verge of collapse.”
The Trump family businesses have been intertwined with various cryptocurrency endeavors for the past several years, raising ethical concerns about foreign influence and conflicts of interest. World Liberty Financial (WLF) is one of those entities and was involved in a $2 billion transaction by a state-owned United Arab Emirates firm, MGX, last year. Legal experts criticized the deal as a potential violation of the emoluments clause of the U.S. Constitution.
The management of WLF includes Trump’s sons, Donald Trump Jr. and Eric Trump, and Zach Witkoff, son of Trump Middle East Envoy Steve Witkoff. The president is listed as the company’s “chief crypto advocate” and his youngest son, 20-year-old Barron Trump, is named the “DeFi (decentralized finance) visionary.” In February, Donald Jr. and Eric Trump hosted a “World Liberty Forum” to promote the crypto firm’s offerings.
Sun was among the investors in WLF, according to the 52-page complaint (embedded below) he and several of his corporate entities filed against World Liberty Financial in the U.S. District Court for the Northern District of California on Monday.
In the complaint, Sun says he “lawfully purchased” cryptocurrency in the form of “cryptographically secured digital $WLFI tokens, which at times have been valued at over $1 billion” from WLF, adding that he “is a globally recognized entrepreneur in the crypto industry and the founder of the TRON blockchain network whose native digital TRX tokens currently have a market capitalization of over $31 billion, making them among the top ten most valuable digital assets in the world.”
Sun describes himself as someone who “has long been (and remains) an ardent supporter of President Trump and the Trump family,” and was approached to invest in WLF in 2024, saying that he “invested $45 million” at a “pivotal time” as WLF was launching, citing his reasons as “not only because of the project’s claims that it would promote adoption of decentralized finance—an issue Mr. Sun cares deeply about and to which he has devoted much of his life’s work—but also because of the Trump family’s association with the project.”
However, Sun soon soured on the investment, and the complaint accuses WLF’s “operators” of using the project “as a golden opportunity to leverage the Trump brand to profit through fraud,” and making him “a prime target of their fraudulent scheme,” causing him and his companies “to incur hundreds of millions of dollars in damages.”
The complaint accuses WLF of making multiple false statements to Sun, inducing his investments through fraud, misrepresenting WLF’s compliance with the law, scheming to induce additional investments from Sun, improperly freezing his $WLF1 tokens multiple times, extorting him, “threaten[ing] to burn Mr. Sun’s tokens” and report him to law enforcement, defaming him, and causing other economic and noneconomic harms.
WLF is now “on the verge of collapse” and “severe financial insolvency,” the complaint alleges, and has planned to pay “most of the token sale proceeds—up to 95%—to company insiders.”
The complaint lists causes of action including breach of contract, anticipatory breach of contract, fraud in the inducement, conversion, unjust enrichment, breach of implied covenant of good faith and fair dealing, and declaratory relief. Sun and his companies have demanded a jury trial and are seeking a judgment that orders WLF “to unfreeze the $WLFI tokens that Plaintiffs purchased” from WLF, monetary damages to be determined at trial, additional interim and permanent injunctive relief preventing WLF from “seizing, burning, destroying, or encumbering any of Plaintiffs’ $WLFI tokens,” restitution and/or rescission in the alternative to breach of contract damages,” and costs and attorneys’ fees.
YUCHEN “JUSTIN” SUN et al. vs. WORLD LIBERTY FINANCIAL LLC by sarahrumpf
Disclosure: The law firm of Cahill Gordon & Reindel is among the attorneys representing Sun in this litigation. Mediaite founder and owner Dan Abrams’ father, Floyd Abrams, is a senior counsel at that firm.
This is a breaking news story and may be updated.
The post BREAKING: Billionaire Investor Sues Trump Crypto Project for Fraud, Says It’s on ‘Verge of Collapse’ first appeared on Mediaite.
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