Four Outrageous Details Hidden in Justin Sun's Lawsuit Against WLFI

marsbitPublished on 2026-04-24Last updated on 2026-04-24

Abstract

Cryptocurrency billionaire Justin Sun has filed a lawsuit against World Liberty Financial (WLFI), accusing its executives of fraud, theft, and other violations. The complaint highlights four key allegations: First, it details the controversial history of WLFI co-founder Chase Herro, including past scams, a prison record, tax liens, and alleged visits to Jeffrey Epstein’s private island. Second, Sun claims WLFI secretly upgraded its smart contract without token holder approval, granting itself the power to freeze and seize WLFI tokens—a move allegedly used against Sun. WLFI defended the action as necessary to protect user interests. Third, the dispute may have been fueled by Sun’s $100 million purchase of TRUMP meme tokens issued by a Trump-affiliated project. WLFI reportedly objected, though the purchase was allegedly approved by a Trump family member involved with both projects. Finally, Sun accuses WLFI of operating an unlicensed money transmission business due to its centralized control over token transfers, potentially violating federal and state laws. WLFI CEO Zach Witkoff dismissed the suit as a desperate distraction from Sun’s own misconduct. Herro did not directly address the allegations.

Written by: Aleks Gilbert

Compiled by: Chopper, Foresight News

Cryptocurrency tycoon Justin Sun wants to maintain good relations with Donald Trump, but he has taken a hard line against the former president's business partners.

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

These allegations 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 directs the most damaging content 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 before. And content such as World Liberty's imminent collapse is purely speculative. Nevertheless, this lawsuit will provide ample ammunition for the company's critics, including disgruntled investors and opposition lawmakers waiting to pounce.

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

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 reposted a motivational poem by Rudyard Kipling and Witkoff's statement, captioning it: "Building is never easy; it is often filled with successes and failures, like a huge maze you need to navigate."

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

Herro's Past

Mainstream media reports have previously detailed Herro's checkered history, including a prison record, inflammatory remarks, questionable business practices, and involvement in a DeFi protocol in 2024 that lost almost all of its crypto assets due to a hack.

The complaint includes all of the above and adds several new details.

The complaint states: "Herro's business misconduct was so egregious that around 2010, deceived clients and partners set up a website called ChaseHeroScam.com."

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

The complaint alleges that Herro has been subject to four federal tax liens, and a tax deed was issued for a property he owned in Florida.

The complaint also states that Herro "publicly boasted" about visiting Little St. James Island, the private island owned by the disgraced financier Jeffrey Epstein. However, the complaint does not provide evidence of this statement, and DL News has not been able to verify whether Herro made such remarks.

"Secret" Upgrade

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

According to company documents, token holders have no right to participate in the operation of World Liberty Financial but can vote on upgrades to the underlying technology.

Sun alleges that World Liberty executives broke their promise and unilaterally and quietly carried out two technical upgrades last year without any governance vote or disclosure to WLFI holders.

The upgrade allegedly gave World Liberty Financial the authority to freeze and seize WLFI tokens, and this authority has been used against Sun. Sun describes this upgrade as a devastating move.

"Although the upgrade is queryable on the public blockchain, World Liberty Financial hid it deep in the code, failing to inform token holders of the function's existence and potential impact," the complaint states. "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违规 behavior, and World Liberty Financial had to take action to protect its own and its users' rights. World Liberty Financial will continue to take all necessary measures to protect the community ecosystem."

TRUMP Meme Coin

World Liberty Financial's allegations of Sun's so-called misconduct have been vague. But Sun says company executives provided detailed explanations in private.

The reasons include: executives determined that Sun's selling of tokens caused the WLFI price to drop by 40%, that he违规 purchased tokens on behalf of others, and that he violated the "token purchase agreement," among others.

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

"World Liberty Financial stated that one of the reasons for freezing the WLFI tokens was dissatisfaction with Sun's purchase of $100 million worth of TRUMP tokens (issued by another Trump-backed project)," the complaint states. Part of the next sentence is redacted, but the ending indicates that something (likely the purchase of TRUMP tokens) "was approved in advance 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 Business违规

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.

Sun alleges that World Liberty Financial is also in violation of this regulation.

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

"World Liberty's highly centralized control over WLFI tokens is not only completely contrary to the philosophy of DeFi but also indicates that it is conducting a money transmission business without registration or a license, violating numerous U.S. federal and state criminal laws."

HIP-3's Watershed Moment: After Trade.XYZ Swallows 90% of the Market, Multiple Players Exit One After Another

HIP-3 on Hyperliquid, enabling permissionless market creation, has fueled rapid growth with over $300 billion in cumulative trading volume. However, the ecosystem is undergoing a sharp consolidation. Trade.XYZ has captured a dominant market share, exceeding 90% of trading volume and 97% of open interest, driven by its first-mover advantage, use of USDC, and rapid asset expansion. This has created a significant liquidity flywheel effect, leaving other projects struggling. Several have recently shut down, including Felix and Ventuals, citing unsustainable competition and the high costs of market deployment. The initial 500,000 HYPE staking requirement (worth ~$35.9M) and subsequent auction costs for new assets present a high barrier to entry. Analysis shows most deployers face low annual yields and multi-year cost recovery periods, unlike Trade.XYZ's estimated 74% yield and 5-month payback. This centralization risks stifling innovation and limiting Hyperliquid's ecosystem diversity beyond perpetual contracts. Proposed solutions include a tiered exchange model with lower entry barriers and adjustments to the fee-sharing model for new markets to improve sustainability for smaller players.

marsbit4m ago

HIP-3's Watershed Moment: After Trade.XYZ Swallows 90% of the Market, Multiple Players Exit One After Another

marsbit4m ago

Has the Cryptocurrency Market Hit Bottom? Here's What Institutions Think

"Has the crypto market bottomed out? Major institutions are divided on the outlook, according to a recent analysis by Matt Hougan, Chief Investment Officer of Bitwise. Three prominent research firms published in-depth reports on the topic with differing conclusions. Galaxy Digital argues Bitcoin has not yet found its bottom, pointing to only 4 out of 13 historical bottoming indicators being met. Their analysis suggests a potential bottom range of $30,000 to $54,000. NYDIG adopts a more cautious stance, noting that while metrics are close to historical bear market lows, a classic panic-selling capitulation event is missing. They acknowledge the possibility of a bottom but consider it unlikely, citing structural changes from institutional adoption. In contrast, Standard Chartered Bank asserts the bottom is already in at around $59,000. Their revised bullish view, predicting a year-end target of $100,000, hinges on anticipated reductions in ETF selling pressure linked to events like a potential SpaceX IPO. Despite the surface-level disagreement on the exact price floor, the reports share significant common ground crucial for long-term investors. All three institutions agree that a market bottom will likely form within the current year, that current prices are closer to the bottom than to previous cycle highs, and that Bitcoin is poised for another major bull cycle in the future. The core takeaway is that while the precise bottom level remains debated, the long-term value proposition for Bitcoin remains strong and may even be strengthening. Key supportive trends include rising global debt, persistent inflation, declining trust in traditional institutions, accelerating digitization, and improving market infrastructure. Therefore, for investors with a long-term horizon, the focus should shift from pinpointing the exact bottom to recognizing that the cycle's peak is likely still ahead, making current levels an attractive entry point for substantial potential upside."

Foresight News10m ago

Has the Cryptocurrency Market Hit Bottom? Here's What Institutions Think

Foresight News10m ago

Arthur Hayes Acquires 3,000 ETH as Iran Deal Lifts Crypto Market Sentiment

BitMEX co-founder Arthur Hayes has significantly shifted his investment strategy by acquiring 3,000 ETH (worth approximately $5.4 million) from market maker Flowdesk. This large purchase marks a departure from his recent actions, which involved reducing exposure to several high-risk cryptocurrencies as a defensive move amid macroeconomic concerns. The transaction occurred against a backdrop of improved market sentiment, attributed to positive geopolitical developments, notably a conflict settlement involving Iran. This has contributed to increased risk appetite, lower oil prices, and a broader uptick in crypto assets. Hayes maintains a positive long-term outlook on Ethereum, emphasizing its role in decentralized finance and blockchain technology. Market observers view his substantial ETH accumulation as a significant signal for the digital asset market, highlighting how monetary policy and geopolitical factors influence liquidity and investor behavior.

TheNewsCrypto11m ago

Arthur Hayes Acquires 3,000 ETH as Iran Deal Lifts Crypto Market Sentiment

TheNewsCrypto11m ago

2029 Finale Prediction: When Cryptocurrency Completely "Vanishes", Who Can Remain in This Financial Upheaval?

By 2029, the crypto industry will have transformed into a largely invisible but foundational layer for traditional finance. This timeline outlines the key shifts from now until then. By mid-2026, the most sought-after assets on-chain will not be traditional tokens, but synthetic perpetual contracts for private, high-growth companies (like SpaceX, OpenAI). These become primary price discovery tools, highlighting the market's craving for real-world asset value. Most altcoins enter a sustained bear market as their fundamental lack of asset-backed value is exposed. In late 2026, the "AI + Crypto" narrative largely fades as AI giants prove they don't need crypto infrastructure, except for prediction markets betting on model performance. Simultaneously, a quiet but significant wave of tokenization for institutional assets (money market funds, private credit) begins. The industry splits into a noisy speculative economy and a silent institutional one. Throughout 2027, major public blockchain foundations pivot decisively to serve institutional clients, building compliance toolkits and sales teams. However, key sectors hit growth ceilings: private perpetual contracts are legally restricted from public promotion, stable币 growth is capped by looming political uncertainty, and tokenization projects remain cautious. In 2028, following a U.S. election assumed to maintain a regulatory (not prohibitive) stance, a pivotal change occurs. After a major liquidation crisis exposes the flaws of synthetic contracts lacking a real-asset anchor, new regulations allow the *public solicitation* of private security sales (secondary market shares) to accredited investors. This creates a legitimate, direct on-ramp for retail capital into previously illiquid private equity. By 2029, the resulting bull market is driven by trading in real, innovative company shares (biotech, robotics, AI labs), not speculative tokens. "Crypto" as a distinct asset class recedes; it becomes the mundane, unseen plumbing for this new global private markets infrastructure. Tokens that survive are those capturing real cash flows from this infrastructure. Speculation persists but is marginalized. The core questions posed at the start are answered: token value is tied to legally enforceable claims on real assets, frontier tech adoption happens via private market channels, and crypto's absorption into traditional finance is marked by its becoming boring and invisible. The key validation for this entire thesis is whether, by late 2028, a legal pathway exists for ordinary accredited investors to access private assets directly.

marsbit53m ago

2029 Finale Prediction: When Cryptocurrency Completely "Vanishes", Who Can Remain in This Financial Upheaval?

marsbit53m ago

After the U.S. Banned Fable 5, Zhipu's Stock Soared 47%

On June 15, Chinese AI company Zhipu's stock surged up to 47.6% in Hong Kong, closing with a 32.82% gain. This sharp rise followed two key industry events. On June 12, Anthropic was compelled by a U.S. government export control order to suspend global access to its latest flagship models, Claude Fable 5 and Claude Mythos 5, impacting developers and businesses reliant on them. The next day, Zhipu announced it was opening access to its new open-source flagship model, GLM-5.2, for all Coding Plan users, with API and model weights (under the MIT license) to follow. The Anthropic incident highlighted a critical shift in the AI industry: beyond raw capability, the stability, continuous accessibility, and control over AI models are becoming equally vital, especially as AI integrates deeper into business workflows. Zhipu's move, emphasizing that "frontier intelligence should not belong to a few nor be subject to arbitrary revocation," positioned its open, accessible model as an alternative. GLM-5.2 focuses on "Long Horizon Tasks" with a 1M context window, aiming for consistency in complex, extended projects. Market analysts suggest this event exposes the risk of dependency on closed-source models subject to single jurisdiction policies, potentially accelerating a shift toward domestic base models and localized deployments. The investment response indicates a new valuation metric is emerging—prioritizing which companies can provide AI capabilities that are not only advanced but also reliably and sustainably accessible.

marsbit54m ago

After the U.S. Banned Fable 5, Zhipu's Stock Soared 47%

marsbit54m ago

Trading

Spot

Futures

Hot Articles

How to Buy SUN

Welcome to HTX.com! We've made purchasing SUN (SUN) simple and convenient. Follow our step-by-step guide to embark on your crypto journey.Step 1: Create Your HTX AccountUse your email or phone number to sign up for a free account on HTX. Experience a hassle-free registration journey and unlock all features.Get My AccountStep 2: Go to Buy Crypto and Choose Your Payment MethodCredit/Debit Card: Use your Visa or Mastercard to buy SUN (SUN) instantly.Balance: Use funds from your HTX account balance to trade seamlessly.Third Parties: We've added popular payment methods such as Google Pay and Apple Pay to enhance convenience.P2P: Trade directly with other users on HTX.Over-the-Counter (OTC): We offer tailor-made services and competitive exchange rates for traders.Step 3: Store Your SUN (SUN)After purchasing your SUN (SUN), store it in your HTX account. Alternatively, you can send it elsewhere via blockchain transfer or use it to trade other cryptocurrencies.Step 4: Trade SUN (SUN)Easily trade SUN (SUN) on HTX's spot market. Simply access your account, select your trading pair, execute your trades, and monitor in real-time. We offer a user-friendly experience for both beginners and seasoned traders.

7.0k Total ViewsPublished 2024.03.29Updated 2026.06.02

Discussions

Welcome to the HTX Community. Here, you can stay informed about the latest platform developments and gain access to professional market insights. Users' opinions on the price of SUN (SUN) are presented below.