In brief
- Justin Sun said his lawyers filed a motion seeking sanctions against World Liberty Financial over the timing of its disclosure that its ownership gives it UAE citizenship.
- Sun says World Liberty first listed Florida as its only citizenship, then amended its filing to list 22 members and UAE ties, and now argues the federal court lacks jurisdiction.
- Sun, who invested $45 million in WLFI tokens, plans to refile his lawsuit in California state court once the motion is resolved.
Justin Sun’s legal fight with World Liberty Financial now hinges on a question of nationality.
The Tron founder said Tuesday on X that his lawyers have asked a federal court in California to sanction the Trump family-backed crypto venture over how long it took to disclose that its ownership chain gives it citizenship in the United Arab Emirates.
Sun says he is one of World Liberty’s earliest and largest investors. He agreed in November 2024 to buy $30 million of its WLFI tokens and later raised his total investment to $45 million.
In April, he sued the company, alleging it misled him into investing and then unlawfully froze his tokens. World Liberty has fired back in court, alleging that Sun shorted WLFI and drove down its price.
The current dispute turns on a technical point. Sun chose to sue in federal court, which can hear cases between parties from different places but generally can’t hear a foreign plaintiff’s case against a foreign defendant.
As Sun explained it, a company like World Liberty takes on the citizenship of each of its owners, so a single foreign owner makes the whole company foreign for those purposes.
According to Sun, World Liberty’s initial court disclosure listed only itself, with Florida as its sole citizenship. A judge signaled at an August hearing that some of Sun’s claims should stay in open court rather than go to arbitration.
→Less than a week later, Sun says, the company amended the disclosure to list 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico, and the UAE. World Liberty now argues that the federal court lacks jurisdiction over the case, according to Sun.
Sun argues the late disclosure was a tactic to move the case out of federal court, and his motion seeks to make World Liberty and its lawyers bear the cost. He contrasted the company’s position with its own marketing, posting excerpts from World Liberty’s “gold paper” that describe it as “an American, tax-paying, corporation.”
Once the sanctions motion is resolved, Sun said, he will refile his lawsuit in California state court. “I will keep fighting for the transparency this community deserves,” he wrote.
The feud has played out publicly for months. Sun has criticized how World Liberty treats its investors and alleged that the company threatened to burn his WLFI tokens.