Justin Sun's legal dispute with World Liberty Financial has shifted to a question of nationality, with the Tron founder saying his lawyers have asked a federal court in California to sanction the Trump family-backed crypto venture over how long it took to disclose that its ownership chain gives it citizenship in the United Arab Emirates.
Sun announced the motion Tuesday on X. He says he is one of World Liberty's earliest and largest investors, having agreed in November 2024 to buy $30 million of its WLFI tokens before raising his total investment to $45 million.
Background of the dispute
In April, Sun sued the company, alleging it misled him into investing and then unlawfully froze his tokens. World Liberty has fired back in court, alleging that Sun shorted WLFI and drove down its price.
The feud has played out publicly for months. Sun has criticized how World Liberty treats its investors and alleged that the company threatened to burn his WLFI tokens.
The jurisdictional question
The current dispute turns on a technical point. Sun chose to sue in federal court, which can hear cases between parties from different places but generally cannot hear a foreign plaintiff's case against a foreign defendant.
As Sun explained it, a company like World Liberty takes on the citizenship of each of its owners, so a single foreign owner makes the whole company foreign for those purposes.
According to Sun, World Liberty's initial court disclosure listed only itself, with Florida as its sole citizenship. A judge signaled at an August hearing that some of Sun's claims should stay in open court rather than go to arbitration.
Less than a week later, Sun says, the company amended the disclosure to list 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico, and the UAE. World Liberty now argues that the federal court lacks jurisdiction over the case, according to Sun.
Sanctions motion and next steps
Sun argues the late disclosure was a tactic to move the case out of federal court, and his motion seeks to make World Liberty and its lawyers bear the cost. He contrasted the company's position with its own marketing, posting excerpts from World Liberty's "gold paper" that describe it as "an American, tax-paying, corporation."
Once the sanctions motion is resolved, Sun said, he will refile his lawsuit in California state court.
"I will keep fighting for the transparency this community deserves," he wrote.
