Justin Sun is seeking sanctions against Trump-linked World Liberty Financial and its lawyers, alleging that the crypto venture failed to disclose its ties to the United Arab Emirates in his lawsuit over frozen tokens, CoinDesk reported. Sun said the company identified itself as a Florida citizen before later adding foreign entities to its court filing.
The dispute could affect where Sun’s case proceeds. World Liberty now argues that the federal court lacks jurisdiction, while Sun says he plans to refile in California state court after the court resolves his sanctions motion.
Sanctions Against Trump-Linked World Liberty
Sun sued World Liberty in April, alleging fraud and the unlawful freezing of tokens associated with his investment. He said in an X post on Tuesday that the company initially told a California federal court it was a citizen of Florida.
After a judge ruled that some claims could remain in public court rather than move to private arbitration, World Liberty amended its disclosure to include the UAE, Sun said. The updated filing identified 22 entities in the ownership chain and claimed citizenship in Florida, Delaware, Puerto Rico and the UAE.
Sun said the company should have disclosed its foreign ownership at the start of the case. He argued that his lawyers spent months and hundreds of thousands of dollars contesting World Liberty’s request to move the dispute into arbitration.
Dispute Over The Court Filing
World Liberty’s revised disclosure came less than a week after the August hearing, according to Sun. He said the change could prevent the lawsuit from proceeding in federal court because foreign citizens on both sides can affect whether that court can hear this type of case.
World Liberty’s lawyers have said they learned of the UAE citizenship after filing the original disclosure, Sun said. He is asking the court to hold the company and its lawyers accountable for what he calls a misleading filing. The court has not found that World Liberty intentionally concealed its ownership.
Sun was among World Liberty’s earliest and largest investors. He agreed to purchase $30 million worth of WLFI tokens in November 2024 and later raised his total investment to $45 million. The relationship soured after Sun alleged that World Liberty induced his investment through fraud and then froze his tokens, blocking his access to the assets.
World Liberty previously defended its decision to freeze Sun’s tokens. The company could not be reached for comment on the latest allegations. Sun also said the company sought arbitration in April, but he opposed that request.
What Happens To Sun’s Lawsuit
At an August hearing, the court ruled that some claims should remain in public court while others should go to arbitration. The later disclosure has now become the focus of Sun’s sanctions request and World Liberty’s jurisdiction argument.
Sun wrote on X that World Liberty was “proudly American when it was selling tokens” and discovered its UAE ties only when it needed a way out of federal court. The statement reflects Sun’s allegation; the company disputes the account, and the court has not determined that it deliberately hid its ownership.
Related reading includes the Caleb Ward crypto case, the Fabric crypto fraud case and the Key Coin Assets case. These reports concern separate disputes.
Sun says he will refile in California state court once the sanctions motion is resolved. World Liberty argues that the federal court lacks jurisdiction.
