Justin Sun Seeks Sanctions Against World Liberty Over Late UAE Disclosure

Tron founder Justin Sun has asked a federal court in California to sanction World Liberty Financial (WLFI), the Trump family-backed venture, through his lawyers. Sun says the company was slow to disclose that its ownership structure includes members with UAE citizenship. That, he argues, could strip the federal court of jurisdiction over his lawsuit. The information comes from Decrypt, citing Sun's statement on X.

Citizenship at the heart of the dispute

Federal courts can hear disputesДиспутDispute: a formal claim by a customer against a bank, payment system or operator over a disputed transaction, payout or bet, reviewed under established rules. between parties from different states or countries, but they generally do not take cases where a foreign plaintiff sues a foreign defendant. Sun explains that a company takes on the citizenship of each of its owners, so a single foreign member makes the whole company foreign for jurisdictional purposes.

According to Sun, World Liberty's initial court disclosure listed only itself, with Florida as its sole citizenship. Less than a week after an August hearing, at which a judge indicated that some of Sun's claims should stay in open court rather than go to arbitration, the company amended the disclosure. It now lists 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico and the UAE. Sun says World Liberty now argues that the federal court lacks jurisdiction.

Background

Sun agreed in November 2024 to buy $30 million worth of WLFI tokens and later raised his totalТоталTotal is a bet on the total number of points, goals, games or other events in a match relative to the bookmaker's line: over or under. investment to $45 million. In April he sued, alleging that he was misled into investing and that the company unlawfully froze his tokens. World Liberty has countered that Sun shorted WLFI and drove down its price.

What Sun wants

Sun argues the late disclosure was a tactic to move the case out of federal court, and his motion asks that World Liberty and its lawyers bear the costs. He also set the company's position against its own marketing, quoting its "gold paper" describing it as "an American, tax-paying, corporation." Once the motion is resolved, Sun says he will refile the lawsuit in California state court.

The public feud has run for months. Sun has criticized how World Liberty treats its investors and says the company threatened to burn his WLFI tokens. No court ruling on the motion is available yet, so only the parties' statements are known.