- Sun seeks about $263,821 in legal fees for opposing the company’s bid to compel arbitration.
- The company added UAE citizenship to its disclosure six days after an August hearing on arbitration.
- The judge has not found intentional concealment. Sun says he plans to refile his claims in California state court.
Tron founder Justin Sun has asked a California federal judge to sanction World Liberty Financial and its lawyers over a late ownership disclosure. Sun says he spent about $263,821 fighting the company’s bid for private arbitration before it disclosed UAE citizenship. The company now argues that the same federal court lacks authority to hear his frozen-token case.
Why World Liberty Financial Changed Its Citizenship Filing
The federal court’s filing log records the sanctions motion on November 2. In a statement the next day, Sun said the company’s June disclosure listed Florida as its sole citizenship. Its August 26 amendment identified 22 people and entities in its ownership chain. It listed Florida, Delaware, Puerto Rico and the United Arab Emirates.
The timing matters to Sun’s request for legal fees. At an August 20 hearing, the judge indicated that some claims could remain in court while others belonged in arbitration. World Liberty Financial amended its disclosure six days later. Sun argues that an accurate first filing would have raised the jurisdiction question before he incurred those costs.
According to Sun, the company’s lawyers said they learned of the UAE citizenship after the initial filing. The court has not found that the company deliberately concealed its ownership.
How UAE Citizenship Could Change Where Sun Pursues His Claims
Sun and two companies he controls sued World Liberty Financial in April. They relied on diversity jurisdiction, which allows federal courts to hear certain disputes based on the parties’ citizenship. A limited liability company takes the citizenship of its members. Here, UAE citizenship on the defense side could defeat that basis for hearing claims brought by foreign plaintiffs.
The underlying lawsuit concerns Sun’s $45 million investment in WLFI tokens. Sun alleges that World Liberty Financial induced him to invest through fraud and later blocked him from transferring his holdings. The company disputes those allegations and has defended the freeze.
The sanctions motion concerns the ownership filing, separate from whether the company lawfully froze the tokens. Sun said he plans to pursue the token claims in California state court after the federal judge rules on sanctions.
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