Justin Sun announced on Aug. 20 that a California federal judge rejected World Liberty Financial's attempt to force all of his claims into private arbitration, keeping his individual allegations in open court. The public docket confirms that World Liberty had filed a motion to compel arbitration alongside a separate motion to seal case materials.
This development follows the Office of the Comptroller of the Currency granting preliminary conditional approval for the World Liberty Trust Company six days prior. The national trust bank is intended to take over the issuance of USD1 and its reserve assets from BitGo. However, the approval remains preliminary and conditional, meaning the trust cannot commence operations until it satisfies a list of pre-opening requirements. The OCC retains the authority to modify, suspend, or rescind its approval before final authorization.
The legal dispute traces back to September 2025, when World Liberty restricted Sun-linked WLFI holdings as tokens moved toward exchanges. Sun filed a lawsuit in April, alleging the company froze his tokens and built tools to restrict sales. World Liberty has disputed this account, alleging that Sun made prohibited transfers and acted against project interests.
The administrative powers of the project came under scrutiny in June when wallets connected to the exchange HTX were frozen during a separate dispute, leading HTX to delist USD1 and convert customer balances into USDT.
According to OCC documents, the proposed trust bank and World Liberty Financial LLC share indirect common ownership, though the bank will not issue, custody, or deal in WLFI tokens. World Liberty Trust is also required by the OCC to hold at least $20 million in Tier 1 capital, which is separate from the reserves meant to back USD1 redemptions.
As the litigation continues in public court, the OCC maintains discretion over whether the World Liberty Trust Company ultimately receives final authorization to open.
