Justin Sun Seeks Sanctions as World Liberty’s UAE Citizenship Pushes His Suit Toward State Court

Justin Sun said in an X post on Tuesday that his lawyers moved Monday night to sanction World Liberty Financial “for failing to disclose, until months into my litigation against the company, that it is a citizen” of the UAE. Unchained could not obtain the motion or either of WLF’s ownership disclosures through free public docket services.
Sun said he would file the case anew in California state court once the federal judge decides the sanctions request. The case, Sun et al. v. World Liberty Financial LLC (No. 3:26-cv-03360), is now before Judge James Donato in federal court in the Northern District of California.
Sun sued in April, accusing WLF, the Trump family-backed crypto venture, of using fraud to secure his money and then freezing his tokens unlawfully. By Sun’s account, his investment began with a $30 million purchase agreed in November 2024 and reached $45 million in total. Unchained’s April report put his position at about $75 million. At the time, WLF co-founder Zach Witkoff called the suit “a desperate attempt to deflect attention from Sun’s own misconduct.”

Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter.

Why Citizenship Decides the Court
Because of the UAE citizenship, Sun said, WLF now contends the case doesn’t belong in federal court. In Sun’s telling, the rule turns on where each side is from: a federal court can usually take a suit brought from outside the U.S. against an American company, but not one where both sides are foreign, and an LLC carries the citizenship of each of its owners. He said the ownership disclosure WLF filed at the outset listed a single entity, WLF, and a single citizenship, Florida.
Sun said that after an August hearing on WLF’s bid to send the case to arbitration, at which the court kept some of his claims in open court, WLF “corrected” that disclosure “less than a week later.” By Sun’s account, the revised filing listed 22 members where the first had listed one, and their citizenships ranged across Florida, Delaware, Puerto Rico and the UAE. Sun’s post does not say which member is a UAE citizen.
Sun said WLF’s lawyers claim not to have known about the UAE citizenship when they made the first filing. If so, he said, either the lawyers “failed to conduct appropriate diligence” or WLF “did not give its lawyers a straight answer.” Sun said he filed the motion “to hold World Liberty and its lawyers accountable for what I believe was a misleading disclosure to the Court.”
How WLF Describes Itself
The passages Sun quotes from WLF’s gold paper, the company’s version of a white paper, match the document WLF publishes, which says the company “is not organized offshore,” calls it “an American, tax-paying, corporation” and describes it as “a Florida limited liability company.”
Related Listen: Bits + Bips: Is Kalshi Headed to the Supreme Court Next?

{“@context”:”http://schema.org/”,”@id”:”https://unchainedcrypto.com/justin-sun-seeks-sanctions-as-world-libertys-uae-citizenship-pushes-his-suit-toward-state-court/#arve-youtube-lcljrdedi0i”,”@type”:”VideoObject”,”embedURL”:”https://www.youtube-nocookie.com/embed/LCLJRDeDi0I?feature=oembed&iv_load_policy=3&modestbranding=1&rel=0&autohide=1&playsinline=1&autoplay=0″}

The post Justin Sun Seeks Sanctions as World Liberty’s UAE Citizenship Pushes His Suit Toward State Court appeared first on Unchained.