CoinDesk
Justin Sun is seeking sanctions against World Liberty Financial and its lawyers, alleging they failed to disclose the venture’s UAE ties until months into his lawsuit over frozen WLFI tokens. Sun says he invested $30 million in November 2024 and later raised his total investment to $45 million.
Why it matters
Sun sued the Trump-linked crypto venture in April, alleging fraud and the unlawful freezing of tokens he had purchased. World Liberty has defended its decision to freeze the tokens. The allegations remain disputed, and the court has not found that the company intentionally concealed its ownership.
The dispute has shifted toward jurisdiction. Sun says World Liberty initially disclosed only Florida citizenship, then added 22 entities in its ownership chain and claimed citizenship in Florida, Delaware, Puerto Rico and the UAE. World Liberty now argues that its UAE citizenship prevents the case from proceeding in federal court. Federal courts generally cannot hear this type of case when foreign citizens are on both sides.
Market impact
A judge ruled at an August hearing that some of Sun’s claims could remain in public court while others should go to arbitration. World Liberty revised its corporate disclosure less than a week later, according to Sun, who says the timing and the earlier filing warrant sanctions.
Sun plans to refile in California state court once the sanctions motion is resolved. The outcome could determine where the claims over his $45 million WLFI investment are heard, but the court has not yet resolved the allegations or the jurisdiction dispute.
Frequently asked questions
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How much did Justin Sun invest in World Liberty Financial?
Sun says he agreed to buy $30 million in WLFI tokens in November 2024 and later raised his total investment to $45 million.
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Why is World Liberty Financial challenging the federal court case?
World Liberty argues that its UAE citizenship prevents the case from proceeding in federal court. Federal courts generally cannot hear this type of case when foreign citizens are on both sides.
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What did World Liberty Financial disclose about its ownership?
Sun says the company initially disclosed only Florida citizenship, then identified 22 entities in its ownership chain and claimed citizenship in Florida, Delaware, Puerto Rico and the UAE.
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What did the judge decide about arbitration?
At an August hearing, the judge ruled that some of Sun’s claims could remain in public court while others should go to arbitration.
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Where does Justin Sun plan to pursue the lawsuit next?
Sun plans to refile in California state court once the sanctions motion is resolved. The court has not determined that World Liberty intentionally concealed its ownership.
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