Justin Sun Demands Sanctions Against World Liberty Financial

Tron blockchain founder Justin Sun has filed a motion in the California federal court seeking sanctions against the cryptocurrency project World Liberty Financial and its attorneys. The entrepreneur claims that the company failed to timely disclose information about foreign participants in its ownership structure, affecting the course of the legal proceedings regarding the freezing of WLFI tokens.

Sun announced the filing of the motion on November 3, 2026. He asserts that World Liberty Financial failed to disclose its ties with the United Arab Emirates (UAE) for several months, even though this information was necessary to determine the federal court's jurisdiction.

In the initial documents, the company only listed Florida as the jurisdiction determining its corporate affiliation. However, on August 26, World Liberty submitted an amended disclosure, including 22 individuals and entities in its ownership structure. It also listed Florida, Delaware, Puerto Rico, and the UAE.

This information is significant for U.S. law, as the presence of foreign participants on both sides of the dispute may limit the federal court's jurisdiction. Following the document update, World Liberty Financial stated that the case should not be heard at the federal level due to the foreign affiliation of the parties.

Sun challenges the company's actions in court

According to Sun, World Liberty should have disclosed the full ownership structure at the beginning of the proceedings in April 2026. Instead, his legal team spent several months contesting the company's demand to transfer the dispute to private arbitration, spending hundreds of thousands of dollars in the process.

At a hearing on August 20, the court determined that some of Sun's claims could remain in federal court, while others were subject to arbitration. Six days later, World Liberty presented updated information about the owners.

Sun claims that the company's attorneys either failed to conduct a sufficient check of the ownership structure or received incomplete information from the client. He also states that World Liberty did not explain why foreign participants were not listed in the initial documents.

The entrepreneur demands that the company and its lawyers be held accountable for the alleged violations and the incurred legal expenses. However, the court has not yet determined whether the information disclosure was intentionally delayed.

The dispute involves the blocking of WLFI tokens

Sun's initial lawsuit concerns WLFI tokens acquired under an investment agreement from November 2024. The entrepreneur initially invested $30 million in the project and later increased the total investment to $45 million.

In April 2026, he accused World Liberty Financial of unlawfully blocking his tokens and restricting his rights to participate in the project's management. Sun also claimed that the company threatened to irrevocably destroy his assets through a token burning mechanism.

World Liberty Financial CEO Zach Witkoff previously rejected the entrepreneur's claims. In May, the company filed a separate lawsuit to protect its business reputation, accusing Sun of spreading information damaging to the project. Sun disagreed with these accusations.

After the motion for sanctions is considered, the Tron founder intends to refile his lawsuit in the California state court. The question of which court will hear the main claims remains open, as does the dispute over the legality of the restrictions on WLFI tokens.