Justin Sun speaks during an press conference in Hong Kong on April 3, 2025. | REUTERS

World Liberty Financial, the crypto venture co-founded by U.S. President Donald Trump and his sons, said on Monday it had filed a defamation lawsuit in Florida state court against Hong Kong-based crypto entrepreneur Justin Sun, as a dispute ​escalates between the project and one of its most prominent backers.

World Liberty posted a copy of its lawsuit ‌on ‌X in which it accused Sun of launching a "public smear campaign." It alleged that Sun ​had improperly transferred some of his WLFI tokens that come with voting and governance rights to crypto exchange Binance and, separately, that he had placed bets that WLFI would decline in market value, known as short-selling. That was ⁠part of a coordinated effort to push the token's market price down as public trading began in September, the lawsuit alleged.

"Justin Sun ⁠engaged in a defamatory campaign to torch World Liberty Financial's reputation.…