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Last year, the Trump family’s World Liberty Financial project froze the $WLFI tokens belonging to crypto billionaire Justin Sun, their largest token investor, with little explanation. Now he’s suing them for contract violations and fraud, and they’re suing him for defamation.
#crypto #cryptocurrency #USpol #USpolitics #citationNeededNewsletter
![Sun v. World Liberty
Sun filed a May 5 lawsuit in a California federal court alleging World Liberty vindictively froze his $WLFI tokens after he refused to invest hundreds of millions of dollars more into minting the project’s stablecoin, USD1, on his Tron blockchain.2 He claims World Liberty threatened to destroy the frozen tokens and report him to US authorities — presumably the very authorities who had mysteriously dropped their investigations and lawsuits against him shortly after his substantial investments into Trump family projects [I102].
Sun alleges that World Liberty fraudulently induced investments by marketing itself as a decentralized finance platform that would free users from what the project’s CEO described as “the big boogeyman behind the curtain” of centralized control, while in fact secretly retaining the power to unilaterally freeze tokens. “Far from freeing its users of centralized control, World Liberty positioned itself as the new boogeyman behind the curtain,” the lawsuit observes with a certain dramatic satisfaction.](https://friendica.hellquist.eu/photo/preview/640/5588422 "Sun v. World Liberty
Sun filed a May 5 lawsuit in a California federal court alleging World Liberty vindictively froze his $WLFI tokens after he refused to invest hundreds of millions of dollars more into minting the project’s stablecoin, USD1, on his Tron blockchain.2 He claims World Liberty threatened to destroy the frozen tokens and report him to US authorities — presumably the very authorities who had mysteriously dropped their investigations and lawsuits against him shortly after his substantial investments into Trump family projects [I102].
Sun alleges that World Liberty fraudulently induced investments by marketing itself as a decentralized finance platform that would free users from what the project’s CEO described as “the big boogeyman behind the curtain” of centralized control, while in fact secretly retaining the power to unilaterally freeze tokens. “Far from freeing its users of centralized control, World Liberty positioned itself as the new boogeyman behind the curtain,” the lawsuit observes with a certain dramatic satisfaction.")
![Sun’s lawsuit also repeats his public allegations that World Liberty’s supposedly decentralized community governance is a sham. He alleges that World Liberty co-founder Chase Herro admitted in private communications that governance votes were essentially predetermined, alleging that Herro represented to him that “the World Liberty leadership team controlled a meaningful percentage of the outstanding $WLFI tokens in circulation, and would thus be able to effectively control the outcome of any such vote.”
Sun makes the dramatic claim that World Liberty is “on the brink of collapse and potential insolvency”. As proof, he points to the company’s controversial Dolomite borrowing [I104], and the parallels some have drawn to FTX’s reliance on leveraging self-issued tokens prior to its collapse, as well as the token’s ongoing price decline and World Liberty’s massive payouts to insiders.](https://friendica.hellquist.eu/photo/preview/640/5588426 "Sun’s lawsuit also repeats his public allegations that World Liberty’s supposedly decentralized community governance is a sham. He alleges that World Liberty co-founder Chase Herro admitted in private communications that governance votes were essentially predetermined, alleging that Herro represented to him that “the World Liberty leadership team controlled a meaningful percentage of the outstanding $WLFI tokens in circulation, and would thus be able to effectively control the outcome of any such vote.”
Sun makes the dramatic claim that World Liberty is “on the brink of collapse and potential insolvency”. As proof, he points to the company’s controversial Dolomite borrowing [I104], and the parallels some have drawn to FTX’s reliance on leveraging self-issued tokens prior to its collapse, as well as the token’s ongoing price decline and World Liberty’s massive payouts to insiders.")
It’s a little rich that Sun is alleging that World Liberty is engaged in fraud, manipulating markets, and potentially violating securities laws after himself only just escaping those very allegations after investing more than $200 million into the president’s family’s crypto projects.
But he also has something of a point: after World Liberty Financial promised they were a solution to “debanking” and that “no one’s ever going to tell you that your account is shut down”, they proceeded to do exactly that to Sun.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
![On the one hand, it’s a little rich that Sun is alleging that World Liberty is engaged in fraud, manipulating markets, and potentially violating securities laws after himself only just escaping those very allegations after investing more than $200 million into the president’s family’s crypto projects. And Sun’s lawsuit is selective about which agreements he finds to be binding — while much of the lawsuit is based on promises made in various contracts and marketing materials outlining platform governance and token issuance, Sun also readily admits that he read the claim that WLFI tokens were not investments as mere “disclaimers to avoid application of federal law governing the offering of securities” and that “everybody who purchased the tokens in exchange for real-world dollars knew all along [that] the tokens were expected to become tradable”.](https://friendica.hellquist.eu/photo/preview/640/5588421 "On the one hand, it’s a little rich that Sun is alleging that World Liberty is engaged in fraud, manipulating markets, and potentially violating securities laws after himself only just escaping those very allegations after investing more than $200 million into the president’s family’s crypto projects. And Sun’s lawsuit is selective about which agreements he finds to be binding — while much of the lawsuit is based on promises made in various contracts and marketing materials outlining platform governance and token issuance, Sun also readily admits that he read the claim that WLFI tokens were not investments as mere “disclaimers to avoid application of federal law governing the offering of securities” and that “everybody who purchased the tokens in exchange for real-world dollars knew all along [that] the tokens were expected to become tradable”.")
Sun is also attempting a delicate balancing act: accusing the Trump family’s World Liberty Financial of fraud while simultaneously maintaining he is still an “ardent” supporter of Trump and his family. His strategy is to pin the whole thing on WLF co-founder Chase Herro.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
![Sun walks a narrow tightrope in his lawsuit, criticizing a Trump family-run cryptocurrency project while simultaneously claiming that he “has long been (and remains) an ardent supporter of President Trump and the Trump family”. He attempts this by aggressively targeting World Liberty co-founder Chase Herro instead, reaching all the way back to alleged drug busts when he was a teenager. Sun portrays Herro as a career grifter whose background is in hawking get-rich-quick schemes. He suggests that Herro owes hundreds of thousands in unpaid taxes and accuses him of making contradictory claims about his primary residency — alternately claiming Puerto Rico or Florida — to dodge both tax liabilities and legal proceedings. He even claims that Herro once boasted about visiting Jeffrey Epstein’s island. And he notes Herro’s participation in a crypto project called Dough Finance shortly before joining World Liberty, and points to speculative tweets suggesting the $2 million hack that ended the project [W3IGG] could have in fact been an insider rug pull.
It’s not immediately clear how Herro’s arrest at 18 for selling drugs or his alleged Epstein connectionb relate to Sun’s contract dispute with World Liberty. Instead, it appears Sun is hoping to remain in the Trumps’ good graces by offering to publicly accept Herro as a scapegoat for whatever wrongdoing may have occurred.](https://friendica.hellquist.eu/photo/preview/640/5588418 "Sun walks a narrow tightrope in his lawsuit, criticizing a Trump family-run cryptocurrency project while simultaneously claiming that he “has long been (and remains) an ardent supporter of President Trump and the Trump family”. He attempts this by aggressively targeting World Liberty co-founder Chase Herro instead, reaching all the way back to alleged drug busts when he was a teenager. Sun portrays Herro as a career grifter whose background is in hawking get-rich-quick schemes. He suggests that Herro owes hundreds of thousands in unpaid taxes and accuses him of making contradictory claims about his primary residency — alternately claiming Puerto Rico or Florida — to dodge both tax liabilities and legal proceedings. He even claims that Herro once boasted about visiting Jeffrey Epstein’s island. And he notes Herro’s participation in a crypto project called Dough Finance shortly before joining World Liberty, and points to speculative tweets suggesting the $2 million hack that ended the project [W3IGG] could have in fact been an insider rug pull.
It’s not immediately clear how Herro’s arrest at 18 for selling drugs or his alleged Epstein connectionb relate to Sun’s contract dispute with World Liberty. Instead, it appears Sun is hoping to remain in the Trumps’ good graces by offering to publicly accept Herro as a scapegoat for whatever wrongdoing may have occurred.")
In World Liberty’s defamation suit against Sun, they claim that their ability to freeze his tokens was well known to him, and that claiming they installed a secret “backdoor” is defamatory. They also object to him describing WLF’s governance as a sham, and accusing them of treating the crypto community as “a personal ATM”.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
In short: the two sides are suing one another despite likely knowing the true nature of the deal they agreed to. Sun admits the tokens he bought are unregistered securities, World Liberty admits they’re not decentralized and Sun shouldn’t have taken their claims to be seriously.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
Senior GOP officials reportedly phoned up Commerce Secretary Howard Lutnick to get him to pressure a pro-crypto super PAC funded by the company he “divested” from to nix a planned ad spend in favor of Texas Senate candidate Ken Paxton.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
![In elections and political influence
In an April [noted] post, I outlined how the Fellowship PAC, a new pro-cryptocurrency, pro-MAGA super PAC, is primarily funded by Cantor Fitzgerald — the firm previously run by Howard Lutnick before he “divested” by transferring it to his sons when he was appointed Commerce Secretary.
Link to other Citation Needed article: Commerce Secretary Howard Lutnick’s old firm pumps $10 million into super PAC led by Tether executive](https://friendica.hellquist.eu/photo/preview/640/5588403 "In elections and political influence
In an April [noted] post, I outlined how the Fellowship PAC, a new pro-cryptocurrency, pro-MAGA super PAC, is primarily funded by Cantor Fitzgerald — the firm previously run by Howard Lutnick before he “divested” by transferring it to his sons when he was appointed Commerce Secretary.
Link to other Citation Needed article: Commerce Secretary Howard Lutnick’s old firm pumps $10 million into super PAC led by Tether executive")
![The PAC filed an FEC report announcing planned independent expenditures of $1.75 million to support Republican Senate candidate Ken Paxton in his contentious Texas primary runoff against incumbent John Cornyn.7 Trump has conspicuously declined to endorse either candidate. According to Axios, senior Republican officials called Lutnick to pressure him to cancel the expenditures, which they viewed as a potentially disastrous move.8 “Backing the guy who came in second place [in the GOP state primary] and risk[ing] handing Democrats the Senate is pure political malpractice”, said an NRSC spokesperson about the planned ad spend. While Axios noted that “it was unclear to people familiar with the matter if Lutnick followed up on those phone calls,” the Fellowship PAC later amended the report with the Paxton line item missing and a note that they had “remove[d] an ad with no anticipated air date”.9
Transferring the mega-firm to his 29- and 27-year-old sons was already a highly dubious divestiture. But if GOP officials believe pressuring Lutnick is a worthwhile strategy to influence a super PAC primarily funded by the firm he now supposedly has nothing to do with — and if that strategy apparently works — it’s further evidence that Lutnick has not properly eliminated this massive conflict of interest.](https://friendica.hellquist.eu/photo/preview/640/5588409 "The PAC filed an FEC report announcing planned independent expenditures of $1.75 million to support Republican Senate candidate Ken Paxton in his contentious Texas primary runoff against incumbent John Cornyn.7 Trump has conspicuously declined to endorse either candidate. According to Axios, senior Republican officials called Lutnick to pressure him to cancel the expenditures, which they viewed as a potentially disastrous move.8 “Backing the guy who came in second place [in the GOP state primary] and risk[ing] handing Democrats the Senate is pure political malpractice”, said an NRSC spokesperson about the planned ad spend. While Axios noted that “it was unclear to people familiar with the matter if Lutnick followed up on those phone calls,” the Fellowship PAC later amended the report with the Paxton line item missing and a note that they had “remove[d] an ad with no anticipated air date”.9
Transferring the mega-firm to his 29- and 27-year-old sons was already a highly dubious divestiture. But if GOP officials believe pressuring Lutnick is a worthwhile strategy to influence a super PAC primarily funded by the firm he now supposedly has nothing to do with — and if that strategy apparently works — it’s further evidence that Lutnick has not properly eliminated this massive conflict of interest.")
The crypto industry is ramping up polling to try to (once again) convince legislators who are up for re-election that they need to support the industry’s legislative agenda in order to win over voters. But two massively different poll results illustrate the dubiousness of these polls.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
![But this poll doesn’t align with CoinDesk’s, which I should also note is a pro-crypto publication whose new editorial board endorsed Trump in 2024 [I68]. In a very similar question, 24% of respondents identified crypto as important to them in the 2026 elections — less than half of HarrisX’s findings. Only 1% identified it as the single most important issue to them when presented alongside issues like cost of living, the economy, Social Security and Medicare, immigration, or healthcare. HarrisX did not immediately respond to my request for poll data or questions about their methodology or who commissioned the poll.](https://friendica.hellquist.eu/photo/preview/640/5588406 "But this poll doesn’t align with CoinDesk’s, which I should also note is a pro-crypto publication whose new editorial board endorsed Trump in 2024 [I68]. In a very similar question, 24% of respondents identified crypto as important to them in the 2026 elections — less than half of HarrisX’s findings. Only 1% identified it as the single most important issue to them when presented alongside issues like cost of living, the economy, Social Security and Medicare, immigration, or healthcare. HarrisX did not immediately respond to my request for poll data or questions about their methodology or who commissioned the poll.")
The DOJ and CFTC are going after a US soldier who allegedly used his access to confidential military information to profit more than $400,000 on Polymarket bets. They are not going after Polymarket, which is supposed to prohibit US bettors, and whose advisory board includes Donald Trump Jr.
“The whole world, unfortunately, has become somewhat of a casino,” said former casino tycoon and current President Trump.
“I don’t like it,” said the man whose own social media platform has announced plans to launch a crypto-based prediction market feature.
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
Newsletter: Crypto billionaire Justin Sun, who escaped fraud allegations after investing hundreds of millions of dollars into the Trump family’s crypto projects, is now accusing the Trumps’ project of fraud.
citationneeded.news/issue-105/
#crypto #cryptocurrency #USpol #USpolitics #CitationNeededNewsletter
Issue 105 – The new boogeyman
A crypto billionaire who escaped fraud allegations after investing hundreds of millions of dollars into the Trump family’s crypto projects is now accusing them of fraudMolly White (Citation Needed)
New: President Trump's memecoin project is preparing to launch a membership club promising "elite and extraordinary experiences". This is the latest attempt to prop up a token down 97% from peak.
citationneeded.news/trump-coin…
#crypto #cryptocurrency #USpol #USpolitics
President Trump’s $TRUMP memecoin is preparing to launch a “Coin Club” membership scheme
The website promises "elite and extraordinary experiences" as part of the newest scheme to revive a token that’s down 97% from its peak and still falling.Molly White (Citation Needed)
Newsletter: Although Sam Bankman-Fried tried to withdraw his motion for a new trial, Judge Kaplan rejected it on its merits. This leaves Bankman-Fried with essentially no realistic avenues to avoid his 25-year prison sentence.
citationneeded.news/sbf-new-tr…
No new trial for Sam Bankman-Fried
The former CEO of FTX has essentially no realistic avenues left to avoid his 25-year prison sentenceMolly White (Citation Needed)
How It Started: This is why #cryptocurrency with its #decentralized #defi will succeed over fiat because we won't have a repeat of 2008 where the bank spent all your money and then got bailed out!
How's It Going: decrypt.co/365724/aave-led-def…
Aave-Led 'DeFi United' Relief Effort Raises $300 Million to Cover Kelp DAO Exploit Losses
The Aave-led relief effort has gained widespread support, securing enough commitments to replenish the swiped funds.André Beganski (Decrypt)
The White House says Commerce Secretary Howard Lutnick properly divested from Cantor Fitzgerald by transferring leadership to his sons.
Anyway GOP officials called Lutnick about a Cantor-funded PAC planning to spend $1.75M on Ken Paxton and the PAC reversed course, but that’s probably just how independent companies behave when the former owner gets a phone call.
