Justin Sun seeks sanctions on World Liberty over hidden UAE citizenship
- Justin Sun asked a US federal court to sanction World Liberty Financial, accusing it of concealing UAE ownership links during their legal dispute.
- World Liberty’s revised filing lists 22 entities in its ownership chain and citizenship ties to Florida, Delaware, Puerto Rico and the UAE, potentially threatening the court’s jurisdiction.
- Sun plans to refile the lawsuit in California state court after the sanctions motion is resolved.
Tron founder Justin Sun has asked a US federal court to sanction World Liberty Financial (WLFI), saying it concealed its United Arab Emirates (UAE) citizenship for months during their legal fight.
Sun announced on X on Tuesday, November 3, that his lawyers had made the move the previous night, one that could decide whether his fraud case stays in open court.
What Sun says World Liberty hid
Sun, who says he put $45 million into WLFI tokens, sued World Liberty in April over claims of fraud and the freezing of his holdings.
At the start of the case, World Liberty told the court it was a citizen of Florida and named a single entity in its ownership chain.
However, as Sun confirmed, World Liberty has amended its filing and now lists 22 entities in its ownership chain and claimed citizenship in Florida, Delaware, Puerto Rico and the UAE.
According to Sun, the company was proudly American when it sold tokens, adding, “It discovered its UAE roots only when it needed a way out of an American federal courtroom.”
In his X statement, Sun said that if the company’s lawyers only learned of the UAE link after the first filing, then “either World Liberty’s lawyers failed to conduct appropriate diligence, or World Liberty did not give its lawyers a straight answer.”
He said his team asked for an explanation, and the company refused to tell them how the discrepancy happened.
How does the UAE link threaten the case?
In the US, federal courts can hear cases brought to them by a foreign plaintiff against an American defendant. However, the foreign plaintiff cannot do this in federal court against another foreign defendant.
As it pertains to World Liberty, Sun wrote, “For these purposes, a company like World Liberty takes on the citizenship of each of its owners, so a single foreign owner makes the company foreign.”
So when World Liberty corrected its disclosure and revealed that part of its owners were citizens of the UAE, it meant that there were two foreign parties on both sides, which could effectively strip the federal court of its authority to hear the case.
Sun says that the disclosure only came after he had spent months and hundreds of thousands of dollars opposing World Liberty’s push to move the fight into private arbitration.
An August 20 hearing produced a partial win for Sun, with some claims kept in federal court and others sent to arbitration.
World Liberty filed its revised citizenship disclosure on August 26. A September 29 order then paused the case until October 22 for jurisdictional discovery.
Sun says that after his sanctions motion is resolved in federal court, he will refile his lawsuit against World Liberty in California state court.
World Liberty had countersued him in May, calling his claims a “meritless PR stunt.”
The UAE stake behind the dispute
The UAE ownership at the center of the fight traces to Aryam Investment 1, an Abu Dhabi vehicle backed by Sheikh Tahnoon bin Zayed Al Nahyan, the country’s national security adviser.
It agreed in January 2025, days before President Donald Trump’s inauguration, to buy a 49% stake in World Liberty for $500 million. Of the $250 million paid upfront, $187 million went to Trump family entities.
World Liberty debuted in October 2024 and has drawn scrutiny over its Trump ties since. Its WLFI token hit an all-time high near $0.33 and now trades around $0.051, giving it a fully diluted valuation of roughly $5.1 billion.
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FAQs
Why does World Liberty's UAE citizenship matter to the lawsuit?
Under federal diversity jurisdiction, Sun, a foreign plaintiff, can only stay in federal court if the parties are from different jurisdictions. Because a company takes on its owners' citizenship, World Liberty's UAE ties put foreign parties on both sides and could remove the court's authority to hear the case.
How much did Justin Sun invest in World Liberty Financial?
Sun says he invested $45 million in WLFI tokens before suing the company in April over alleged fraud and the freezing of his holdings.
Who owns the UAE stake in World Liberty Financial?
Aryam Investment 1, an Abu Dhabi vehicle backed by Sheikh Tahnoon bin Zayed Al Nahyan, agreed in January 2025 to buy a 49% stake for $500 million, with $187 million of the upfront payment going to Trump family entities, according to The Wall Street Journal.
Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.
Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
