Tron founder Justin Sun asked a federal court to order $263,821.20 in sanctions against World Liberty Financial and its legal counsel. The dispute stems from the freezing of his 45 million dollar investment in WLFI governance tokens.
According to the official federal court filing, Sun alleged that World Liberty submitted misleading citizenship statements. The entity originally declared Florida as its sole citizenship before adding 22 entities in its ownership chain, including United Arab Emirates entities, nearly three months later.
The amended disclosure emerged six days after the federal judge questioned the company’s motion to compel arbitration. World Liberty’s attorneys subsequently argued that UAE citizenship destroyed diversity jurisdiction, claiming foreign entities stood on both sides of the proceeding.
The legal confrontation started in April 2026 when Sun filed suit alleging fraud after the platform froze his wallet and token holdings. World Liberty countersued for defamation in May 2026, alleging breaches of token purchase terms and reputational damage.
The corporate links followed a January 2025 transaction where an Abu Dhabi-backed entity acquired a 49% stake in World Liberty for $500 million. Concurrently, US lawmakers urged authorities to pause bank review processes regarding the firm until conflicts of interest are formally divested.
Last night, my lawyers moved to sanction World Liberty Financial @worldlibertyfi for failing to disclose, until months into my litigation against the company, that it is a citizen of the UAE 🇦🇪 . #WLFI #USD1
For those who are new to this dispute, I was one of World Liberty’s…
— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) November 3, 2026
World Liberty counsel Sam Cleveland maintained via email on August 26, 2026, that counsel learned of the additional structure shortly before amending disclosures. Sun challenged this defense in an official public statement, arguing the firm always possessed complete knowledge of its beneficial owners.
Attorney Edward Moss specified in a sworn declaration that the requested amount exclusively covers legal work from four lawyers who opposed the arbitration bid. The federal court will hold a hearing on the sanctions request on December 10, 2026.
This article is for informational purposes only and does not constitute financial advice.
