Tron founder Justin Sun says his lawyers have asked a federal court in California to sanction World Liberty Financial (WLF), the crypto company backed by the Trump family.
Sun said on X on Tuesday, 3 November, that WLF delayed disclosing that its ownership chain gives it UAE citizenship. He argues that the late disclosure was a tactic to move his lawsuit against the company out of federal court.
The motion asks the court to make WLF and its lawyers bear the cost, according to Sun. None of the allegations have been tested in court.
The disclosure dispute
According to Sun, WLF’s first court disclosure listed only the company itself, with Florida as its only citizenship.
Less than a week later, an amended disclosure listed 22 members in its ownership chain, with citizenship in Florida, Delaware, Puerto Rico and the UAE. WLF now argues that the federal court does not have jurisdiction over the case, Sun says.
The point matters because, for jurisdiction purposes, a company takes on the citizenship of each of its owners. A single foreign owner can therefore change which court can hear the case.
Sun also pointed to WLF’s own marketing, which he says describes it as “an American, tax-paying, corporation.”
The wider lawsuit
Sun says he is one of WLF’s earliest and largest investors. He agreed in November 2024 to buy $30 million of WLFI tokens and later raised his total to $45 million.
In April, Sun sued WLF, alleging that it misled him into investing and then unlawfully froze his tokens. He also says WLF has threatened to burn his WLFI tokens.
WLF has responded in court by alleging that Sun shorted WLFI and pushed down its price. Both sides’ claims are unproven.
At a hearing in August, a judge indicated that some of Sun’s claims should stay in open court rather than go to arbitration.
“I will keep fighting for the transparency this community deserves,” Sun said.
WLF had not publicly responded to the sanctions motion at the time of writing.
What happens next
The court will decide whether to grant the sanctions motion. Once it is resolved, Sun says he plans to refile the case in California state court.
