TRON founder Justin Sun has secured a procedural victory in his ongoing lawsuit against the Trump-backed World Liberty Financial (WLFI) project. On August 20, 2026, a California federal judge denied an attempt by the project to push Sun’s legal claims into confidential arbitration.
Judge James Donato of the U.S. District Court for the Northern District of California heard arguments on August 20, ultimately rejecting the request to move Sun’s individual claims to private arbitration and seal the case from public view. The court also declined to send every company-related claim to arbitration, ordering both parties to meet and determine which claims remain in open court and which proceed privately.
The lawsuit, designated as Sun et al. v. World Liberty Financial LLC, No. 3:26-cv-03360-JD, was initially filed in April 2026. The dispute centers on Sun's allegations that WLFI secretly embedded backdoor controls in its smart contract. Sun claims these controls permitted the project team to freeze, restrict, or burn token holdings without notice, and that these powers were used against him after their relationship deteriorated.
Sun committed $45 million to the project, contributing $30 million in November 2024 for 2 billion tokens and an additional $15 million in January 2025, positioning himself as WLFI's largest early backer. He also received 1 billion tokens in an advisory capacity, with his total holdings reported to have reached approximately 4 billion tokens and peak valuations estimated between $300 million and $1 billion.
World Liberty Financial has denied any wrongdoing, with co-founder Zach Witkoff previously describing Sun’s claims as entirely meritless. WLFI also filed a counterclaim in Florida accusing Sun of conducting a defamation campaign and engaging in improper transfers.
While the recent ruling does not determine the merits of either side's case, keeping Sun’s claims in open court ensures that subsequent filings, evidence, and arguments will remain visible to regulators, investors, and the public.
