Justin Sun Seeks Sanctions Against World Liberty Over UAE Disclosure
Tron founder Justin Sun has filed a sanctions motion against World Liberty Financial, alleging the Trump family-backed protocol disclosed its UAE citizenship only after months of litigation, in a bid to escape federal court. He plans to refile in California state court.
A new motion from Tron founder Justin Sun puts federal jurisdiction at the center of his fight with World Liberty Financial. Sun said Tuesday he has asked the court to sanction the Trump family-backed DeFi protocol, alleging it failed to disclose its United Arab Emirates citizenship until months into their legal dispute.
The stakes are jurisdictional. Under diversity jurisdiction rules, World Liberty's UAE ties could undermine the federal court's authority over the case. Sun alleges the late disclosure was an attempt to challenge that jurisdiction and move the case out of open court.
What the filings show
World Liberty's initial court disclosure listed a single entity and named Florida as its only citizenship. A later filing identified 22 members and entities in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico and the UAE.
The motion also reaches the lawyers behind that first filing, according to one account of it. Sun says they certified they were "unaware of anyone else who needed to be disclosed."
Sun's post on X framed the timing bluntly.
He said World Liberty disclosed its UAE roots "only when it needed a way out of an American federal courtroom." On the lawyers' conduct, he added:
"either World Liberty's lawyers failed to conduct appropriate diligence, or World Liberty did not give its lawyers a straight answer."
Justin Sun
Procedural timeline
The sequence runs through late summer. An August 20 hearing let some claims remain in federal court and sent others to arbitration. World Liberty filed its supplemental citizenship disclosure on August 26. A September 29 order stayed proceedings until October 22 for jurisdictional discovery.
Sun says his lawyers spent months and hundreds of thousands of dollars opposing World Liberty's arbitration request. He plans to refile in California state court once the sanctions motion is resolved.
The underlying dispute
Sun says he invested $45 million in WLFI tokens; the initial figure was reported as $30 million, under an agreement signed in November 2024. He sued in April, alleging fraud and the unlawful freezing of his tokens. The relationship had deteriorated after Sun accused the project of undisclosed blacklist controls in its smart contracts, and over a proposed governance change extending restrictions on early investors' holdings.
World Liberty filed a defamation suit in Florida in May, calling Sun's action a "meritless PR stunt" and accusing him of a campaign to damage the project's reputation and token price. CEO Zach Witkoff has disputed Sun's account of the restrictions. No response from World Liberty to the sanctions motion has been reported.
Market and legal context
WLFI trades near $0.051, a fully diluted valuation of about $5.1 billion, well below its all-time high of around $0.33.
The case also keeps the project's UAE links in view. Last month, a Circle shareholder sued Trump and World Liberty over deals tied to the UAE, alleging violations of the Foreign Emoluments Clause. Sun had earlier won a ruling to keep the lawsuit public.
