Justin Sun seeks sanctions on World Liberty over late UAE ownership disclosure
Justin Sun asked a federal court to sanction World Liberty Financial, alleging it delayed disclosing UAE ties in his $45 million WLFI token lawsuit.
Tron founder Justin Sun has asked a US federal court to impose sanctions on World Liberty Financial and its lawyers. He accuses them of withholding information about the company's United Arab Emirates citizenship. Sun announced the move on X on Tuesday, November 3, saying his lawyers filed the request the previous night, according to Cryptopolitan.
The request is the latest step in Sun's $45 million lawsuit over WLFI tokens, which he filed on April 21, 2026. The Cryptonomist reports that the complaint alleges fraud, breach of contract and the unlawful freezing of about 4 billion tokens.
Why the ownership disclosure matters
According to Cryptopolitan and BeInCrypto, World Liberty first told the court it was a citizen of Florida and named a single entity in its ownership chain. After an August hearing that went partly against the company, it amended the filing. BeInCrypto, citing Sun's post, says this came less than a week later. The new filing lists 22 entities with ties to Florida, Delaware, Puerto Rico and the UAE.
BeInCrypto explains why this matters. A company takes on the citizenship of each of its owners, and federal courts generally cannot hear a case in which a foreign investor sues a foreign company. Decrypt and The Block both report Sun's claim that the delayed disclosure could remove the federal court's jurisdiction.
Sun says World Liberty's lawyers claim they learned of the UAE link only after the first filing, and that the company has not explained the change. He argues the company presented itself as American when it was selling tokens. The Block reports that Sun plans to refile in California state court. The Cryptonomist says he will do so after the court rules on sanctions.
The underlying token dispute
Sun says World Liberty blocked him from moving the tokens he bought for $45 million and from using his governance rights. He also says it threatened to destroy his holdings through a token-burning mechanism. He alleges the project added a blacklisting function to the WLFI smart contract in 2025 without proper notice or a governance vote.
World Liberty says its terms of sale disclosed its freezing powers. Sun counters that those terms were inserted secretly after the sale. The Cryptonomist reports that CEO Zach Witkoff has disputed Sun's account of the restrictions.
World Liberty filed its own defamation suit against Sun in Florida state court on May 4, 2026. It accuses him of coordinating a campaign to hurt its reputation and token price. Sun rejects the accusations. The Cryptonomist also notes reported UAE links to the project, including a 49% stake allegedly controlled by entities tied to Sheikh Tahnoon bin Zayed Al Nahyan.
What to watch
Traders should watch the court's ruling on the sanctions request and whether the case stays in federal court or moves to California state court. BeInCrypto says the outcome bears on whether Sun can recover his frozen tokens. It also bears on whether a project can lock a holder's coins. The Florida defamation case is running alongside this one. The sources do not report a ruling or a response from World Liberty to the sanctions request.
Sources
- Justin Sun seeks sanctions in $45M WLFI lawsuit over UAE disclosures The Cryptonomist
- Justin Sun seeks sanctions against World Liberty, alleging Trump-linked firm hid UAE ties The Block
- Justin Sun seeks sanctions against Trump-linked World Liberty Financial over UAE ties CoinDesk
- Justin Sun Says Trump's ‘Proudly American' Crypto Firm Claimed UAE Roots to Exit US Court BeInCrypto
- Justin Sun Accuses Trump-Backed World Liberty of Using UAE Ties to Escape Federal Court Decrypt
- Justin Sun says Trump-linked World Liberty hid UAE ownership to escape federal court Cryptopolitan
Written with AI assistance from the sources above and checked against them. Not investment advice.