Justin Sun Seeks $264,000 in Sanctions Over World Liberty's UAE Disclosure

Justin Sun wants a federal judge to penalize World Liberty Financial and the venture's lawyers over how long it took the Trump family-backed company to disclose that its ownership chain includes United Arab Emirates citizens. Sun said on X that his team filed the motion Monday night and announced it Tuesday. Cointelegraph reported the request totals $263,821.20, covering the fees four attorneys billed fighting the company's bid to send the case to arbitration.

The filing sits in Sun et al. v. World Liberty Financial LLC, case No. 3:26-cv-03360, before Judge James Donato in the Northern District of California, according to Unchained. Sun sued the company in April, alleging it misled him into investing and then froze his tokens without permission. He agreed in November 2024 to buy $30 million of WLFI tokens and later raised his total to $45 million, Decrypt reported. Unchained's coverage at the time put the value of his position at about $75 million.

The dispute sits in a longer commercial relationship. In January 2025, an Abu Dhabi-backed investment vehicle agreed to buy a 49% stake in World Liberty for $500 million, a deal that predates the current citizenship fight by more than a year and a half. World Liberty has fired back in court as well, alleging that Sun shorted WLFI and drove down its price, Decrypt noted.

The citizenship question is technical but consequential. A limited liability company takes the citizenship of each of its owners, so one foreign owner can make the whole company foreign for federal diversity jurisdiction, the doctrine that lets federal courts hear suits between parties from different places. Sun says World Liberty's first court disclosure listed a single member, itself, with Florida as its sole citizenship. A judge signaled at an August hearing that some of Sun's claims should stay in open court rather than go to arbitration.

Six days after that hearing, Sun says, the company amended its disclosure to list 22 individuals and entities in the ownership chain, with citizenships spanning Florida, Delaware, Puerto Rico and the United Arab Emirates. His post does not identify which owner holds the UAE citizenship. World Liberty's lawyers then argued that the federal court lacks jurisdiction because both sides of the case are foreign. Sun contends the timing was deliberate, aimed at moving the case out of federal court, and his motion asks the judge to make the company and its attorneys bear the cost of what he calls a misleading filing.

Sun's lawyers sought corporate records and testimony about the ownership chain and when the company's attorneys learned of the UAE connection. They allege World Liberty provided limited documentation but declined to explain why the original disclosure omitted that information, Cointelegraph reported. World Liberty's lawyers say they did not know about the UAE citizenship when they made the first filing. Sun said that, if true, they either failed to conduct appropriate diligence or the company did not give them a straight answer.

"World Liberty presumably always knew who its owners were," Sun said. "When we asked how this happened, World Liberty refused to tell us," Cointelegraph quoted from his post. An Aug. 26 email from World Liberty lawyer Sam Cleveland, included in the court exhibits, said his team had "recently" learned of additional citizenship information while maintaining the company already held UAE citizenship when Sun filed in April, that report said. World Liberty did not respond to a request for comment.

Sun also took aim at the company's own marketing. The passages he quoted from World Liberty's gold paper match the document the venture publishes, Unchained reported; it calls the company "not organized offshore," "an American, tax-paying, corporation" and "a Florida limited liability company." The fight has run in both directions for months. World Liberty filed a defamation suit against Sun in May, alleging false statements and violations of token-sale terms, and Sun has denied those allegations.

Once the sanctions request is decided, Sun said he will refile the lawsuit in California state court. "I will keep fighting for the transparency this community deserves," he wrote. A hearing on the sanctions motion is scheduled for Dec. 10.