WLFI founder Zach Witkoff under scrutiny after video of 2022 drug bust emerges
World Liberty Financial founder Zach Witkoff has been reprimanded after body camera footage resurfaced of a 2022 drug-related arrest.
Summary
- Body camera footage of Zach Witkoff’s 2022 arrest has resurfaced as World Liberty Financial faces a lawsuit against Justin Sun.
- Justin Sun accused the DeFi project of freezing his WLFI tokens and trying to force him to donate his assets.
- Zach Witkoff dismissed the allegations as false and said the company will take steps to protect its community.
According to footage recently released by X, Witkoff was arrested on New Year’s Day 2022 outside the E11EVEN nightclub in Miami, an incident that has gained attention even as the dispute between World Liberty Financial and Sun has gone to court.
Arrest footage resurfaces as WLFI controversy heats up
Video from the scene shows Witkoff talking to police officers during his arrest, including his father, Steve Witkoff. Security guards at the venue said Steve Witkoff tried to enter the club after being denied entry, which led to an altercation.
Police footage shows officers searching and finding a bag of cocaine. Authorities charged Zach Witkoff with disorderly conduct, resisting arrest and criminal mischief at the time.
During their exchange, his account of events seems to change. “I was trying to help a friend,” he told officials at one point, before later adding, “It’s not even mine.” He also insisted that he did nothing wrong and said that he was beaten.
The police repeatedly warned him to resist the situation as the situation escalated. While incarcerated, Witkoff attempted to look into the group’s identity.
“I’m friends with Marc Roberts, I swear to God,” he said, prompting the security guard to reply, “No one cares… Stop dropping names.”
Court records show Witkoff later posted bond and pleaded not guilty. Prosecutors initially pursued the case, but a felony cocaine charge was later dropped, along with one count of resisting arrest.
The legal battle with Justin Sun adds new pressure
The timing of the photo’s distribution comes as World Liberty Financial is facing a lawsuit by Justin Sun, who has accused the Trump-linked DeFi project of coercive practices related to his WLFI holdings.
Sun’s complaint alleges that the platform froze the 4 billion WLFI tokens he received in September and pressured him to remove them from circulation. According to the filing, co-founder Chase Herro warned that if Sun refuses, the project will press for a management vote to eliminate his holding, exercising its control over the token offering.
The lawsuit says the move is part of “an attempt to force Mr. Sun to give more money for the benefit of the company.” It also alleged threats to report Sun to authorities for “unspecified KYC issues,” months before he reached a $10 million settlement with the US Securities and Exchange Commission, without admitting or denying wrongdoing.
Sun also argued that World Liberty tried to prevent a major shareholder from selling to support the price of WLFI, while wrongly accusing it of short selling and contributing to a sharp 40% drop in the token’s price in September.
With WLFI trading near $0.08, Sun’s frozen holdings are worth an estimated $318 million, based on data from CoinGecko.
Witkoff dismisses the claims as “completely frivolous”
Responding publicly, Witkoff dismissed the lawsuit and questioned the Sun’s intentions. “It’s a desperate attempt to call attention to the Sun’s bad behavior,” he said on the X website, adding that the accusations “are pointless.”
World Liberty echoed that decision in a separate statement, saying, “Justin’s favorite act is playing the victim while making baseless allegations to cover up his bad behavior. See you in court.”
The controversy also drew attention to internal disputes over WLFI’s token economy. Sun claims that the project wants to artificially support prices and limit selling pressure, while taking on large stablecoin liabilities using WLFI.
More controversy arose over Sun’s separate $100 million investment in a legally licensed Trump meme coin. Sun said the purchase was previously approved by a member of the Trump family, information that, if accurate, points to direct access between major investors and the project’s inner circle.
As the case moves forward, parts of the complaint are still being redacted, leaving key aspects of the disagreement unclear. Meanwhile, the resurfaced image of the arrest has added another layer of public scrutiny to Witkoff at a time when legal and reputational pressure is already mounting.
