TheBlock
Justin Sun says he has filed a motion seeking sanctions against World Liberty Financial, alleging the Trump-linked DeFi project disclosed its UAE citizenship months into their legal dispute. Sun says he invested $45 million in WLFI tokens and sued the venture in April, accusing it of fraud and unlawfully freezing his tokens.
Why it matters
The dispute centers on World Liberty's amended court disclosure. Its initial filing listed one entity in the ownership chain and Florida as its sole citizenship. A subsequent filing identified 22 members in the ownership chain and claimed citizenship in Florida, Delaware, Puerto Rico and the UAE, according to Sun.
Sun argues the late disclosure was an attempt to challenge federal jurisdiction and move the case out of open court. Under federal diversity jurisdiction rules, he says, the case can proceed in federal court only if he and World Liberty are citizens of different jurisdictions. A company's citizenship for this purpose can depend on that of its owners.
Market impact
Sun says he plans to refile in California state court after the sanctions motion is resolved. World Liberty countersued in May, calling Sun's case a “meritless PR stunt” after his tokens were frozen. The competing claims remain part of an ongoing legal dispute.
World Liberty launched in October 2024 amid scrutiny over its ties to President Donald Trump and his family. WLFI reached an all-time high near $0.33 and trades near $0.051, with a fully diluted valuation of approximately $5.1 billion. The case puts the project's disclosures and token dispute under continued legal and market scrutiny.
Frequently asked questions
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Why is Justin Sun seeking sanctions against World Liberty?
Sun alleges World Liberty disclosed its UAE citizenship months into their legal dispute and says the late disclosure was an attempt to challenge federal jurisdiction.
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What changed in World Liberty's court disclosure?
The initial disclosure listed one entity in its ownership chain and Florida as its sole citizenship. A later filing identified 22 members in the chain and citizenship in Florida, Delaware, Puerto Rico and the UAE, according to Sun.
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How much does Sun say he invested in WLFI?
Sun says he invested $45 million in WLFI tokens. He sued World Liberty in April, accusing it of fraud and unlawfully freezing his tokens.
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Where does Sun plan to take the lawsuit?
Sun says he plans to refile the lawsuit in California state court after the sanctions motion is resolved.
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How does WLFI's current price compare with its all-time high?
WLFI reached an all-time high near $0.33 and trades near $0.051, with a fully diluted valuation of approximately $5.1 billion.
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