Justin Sun's lawyers have asked a federal judge to sanction World Liberty Financial for allegedly failing to disclose its UAE ownership links. The motion could affect the court's authority over his $45 million lawsuit, which centers on frozen WLFI tokens.
Justin Sun's counsel moved on November 3, 2026 to sanction World Liberty Financial (WLF) for failing to disclose its UAE citizenship in ownership disclosures. The Tron founder says the omission could affect the court's authority over his lawsuit against the Trump family-backed project.
A blacklist nobody voted on
Sun filed a federal lawsuit on April 21, 2026, alleging fraud, breach of contract and the unlawful freezing of his WLFI holdings. The core dispute is a "blacklisting" function in the token's smart contract. Sun claims WLF added it in 2025.
According to Sun, the function let WLF block transfers of his approximately 4 billion WLFI tokens. He says this happened without proper notice or a governance vote.
Sun invested a total of $45 million for those tokens. His holdings were purportedly worth over $1 billion at peak trading.
WLF points to its terms of sale
WLF's position rests on its paperwork. The project's power to freeze tokens was allegedly disclosed in the terms of sale. Sun disputes that version and claims the terms were added secretly after the sale.
WLF also hit back. On May 4, 2026, it countersued Sun for defamation in Florida state court. The project accuses him of running a smear campaign and alleges improper conduct on his part regarding token transfers. Tensions escalated after Sun declined further capital calls from the project.
Ownership ties move the fight to disclosure
WLF is co-founded by Trump family members and has ownership ties to UAE investors. Those reportedly include a 49% stake held by entities linked to Sheikh Tahnoon bin Zayed Al Nahyan.
The case sits in the US District Court for the Northern District of California, while WLF's countersuit runs in Florida. The sanctions motion shifts the dispute away from smart contract code and toward corporate transparency. Courts tend to settle questions about their own authority before reaching the merits, so Sun's fraud and contract claims may have to wait.
A federal judge will now decide whose version of the contract counts, once it works out exactly who it is dealing with.
Source: Crypto Briefing
Trading involves risk.
Risk Disclaimer
