- Justin Sun seeks sanctions against World Liberty Financial over alleged hidden UAE ownership.
- Its amended filing lists 22 members in Florida, Delaware, Puerto Rico, plus the UAE.
- The UAE link now lets World Liberty argue the federal court has no jurisdiction.
Tron’s Justin Sun, an early and large investor in World Liberty Financial, has asked a US federal court to sanction the crypto project and its lawyers, saying they hid until months into his lawsuit that part of its ownership sits in the United Arab Emirates, according to his posts on X.
Sun said the disclosure now lets World Liberty argue that the case does not belong in federal court.
Why Citizenship Decides the Venue
Sun said a federal court can hear a dispute like his only when the two sides come from different places. A foreign plaintiff can sue a US company there, he said, but generally not a foreign one. A company such as World Liberty counts as a citizen of every place where an owner is a citizen, so one foreign owner makes it foreign.
How World Liberty’s Filing Changed
- At the start of the case, World Liberty’s required ownership disclosure named one entity, itself, and listed Florida as its only citizenship, Sun said. Its lawyers certified they knew of no one else to disclose.
- World Liberty then moved to send the dispute to private arbitration. At an August hearing, Sun said, the court signaled it was unconvinced, kept some claims in open court and told the parties to agree on which claims go where.
- Less than a week later, World Liberty amended its disclosure to list 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico and the UAE.
- It now argues the court lacks jurisdiction because foreign parties sit on both sides, Sun said.
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What Sun Wants
Sun said World Liberty’s lawyers told him they learned of the UAE link only after the first filing. If so, he said, either they failed to check properly, or the company was not straight with them, and World Liberty declined to explain when asked. His motion seeks to make World Liberty and its lawyers bear the cost of what he called a misleading filing.
A hearing is set for Dec. 10. After the sanctions question is settled, Sun said, he will refile the suit in California state court.
“Token holders deserve to know whether the projects they invest in are telling the truth, both to the public and to courts. I am filing this motion to hold World Liberty and its lawyers accountable for what I believe was a misleading disclosure to the Court, and to make sure that the cost of World Liberty’s gamesmanship falls on them, not on me,” he wrote.
The Underlying Dispute
Sun agreed in November 2024 to buy $30 million of WLFI tokens and later raised his total to $45 million. In April, he sued, alleging the company induced the purchases through fraud and then unlawfully froze his tokens. His agreement lets him sue in California federal or state court, and he chose federal.
World Liberty’s “gold paper” says it is “not organized offshore.” Sun said the company “was proudly American when it was selling tokens” and found its UAE roots “only when it needed a way out of an American federal courtroom.”
The dispute now centers on whether World Liberty’s amended ownership disclosure affects the federal court’s jurisdiction and whether the project and its lawyers should face sanctions over the initial filing. The December 10 hearing will address the sanctions request, while Sun says he plans to pursue the underlying case in California state court afterward. The outcome could determine where the dispute over his frozen WLFI tokens proceeds.
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