Tron founder Justin Sun has asked a federal court in California to sanction World Liberty Financial, the Trump family-backed crypto venture he is suing over his $45 million investment in WLFI tokens.
His complaint is about timing. Sun alleges the company disclosed that its ownership chain gives it citizenship in the United Arab Emirates only once that fact became a way to get his case out of federal court.
Sun summed up his argument in one line: "World Liberty was proudly American when it was selling tokens. It discovered its UAE roots only when it needed a way out of an American federal courtroom."
Why a UAE Owner Can Move a US Case
Citizenship decides which court can hear a dispute. A company structured as an LLC takes the citizenship of every one of its owners, and federal courts generally cannot hear a foreign investor suing a foreign company.
So if World Liberty counts as a UAE citizen, it gains an argument that the federal court is the wrong place for Sun's lawsuit. Sun says that is exactly what the company now argues: that the federal court lacks jurisdiction over the case.
A Florida Company, Then 22 Members
World Liberty's first ownership filing named only itself, a Florida company.
Then came an August hearing that went partly against the firm. A judge signaled there that some of Sun's claims should stay in open court rather than go to arbitration.
Less than a week later, World Liberty amended its disclosure to list 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico and the UAE.
In a post on X, Sun said his lawyers moved to sanction the company "for failing to disclose, until months into my litigation against the company, that it is a citizen of the UAE."
What Sun Wants the Judge to Do
The motion asks the court to make World Liberty and its lawyers bear the cost of the delay. To make his point, Sun posted excerpts from World Liberty's own "gold paper", which describes the company as "an American, tax-paying, corporation."
The sanctions request is also a step on the way out. Once the judge rules on it, Sun said, he will refile his lawsuit in California state court.
"I will keep fighting for the transparency this community deserves," he wrote.
The WLFI Fight Behind the Motion
The dispute goes back to November 2024, when Sun agreed to buy $30 million of WLFI. He later raised his total investment to $45 million.
When he sued in April, his wallet held about 2.9 billion WLFI, and it had been frozen. World Liberty has called the freeze a routine security step.
The company has not stayed on the defensive. It sued Sun for defamation in Florida in May, and it has alleged in court that he shorted WLFI and drove down its price.
What To Watch Next?
The account of the sanctions motion so far comes from Sun's own description of it. Court records for the motion, including the case number and filing date, have not been independently reviewed for this article.
It is also not yet clear how World Liberty will answer the motion. The next marker for anyone following the frozen WLFI is the judge's ruling on sanctions, because that decides when, and where, Sun's case starts again.
