Tron founder Justin Sun has filed a motion asking a federal court to sanction World Liberty Financial and its lawyers, accusing the Trump-linked crypto project of failing to disclose its ties to the United Arab Emirates until months into a legal dispute over frozen WLFI tokens.

Sun said on Tuesday that his lawyers had moved for sanctions against World Liberty Financial, also known as WLFI, alleging that the company did not disclose that it was a citizen of the UAE until after his litigation was underway. Sanctions, in this setting, are penalties a court can impose on parties or their lawyers for misconduct during litigation.

Last night, my lawyers moved to sanction World Liberty Financial @worldlibertyfi for failing to disclose, until months into my litigation against the company, that it is a citizen of the UAE 🇦🇪 . #WLFI #USD1 For those who are new to this dispute, I was one of World Liberty's… — H.E. Justin Sun 👨‍🚀 🌞 (@justinsuntron) November 3, 2026

X post: https://x.com/justinsuntron/status/2117619305479286993?ref_src=twsrc%5Etfw

Sun sued World Liberty in April. He says he invested $45 million in WLFI tokens and that the company later froze the tokens after persuading him to purchase them through fraud. He is seeking sanctions over what he describes as a misleading disclosure in the case.

World Liberty's ownership disclosure

According to Sun, World Liberty's initial disclosure to a California federal court listed only one entity in its ownership chain and identified Florida as its only citizenship. The company also asked in April to move the dispute into private arbitration, a request Sun opposed.

At an August hearing, the judge ruled that some of Sun's claims could remain in public court, while other claims were sent to arbitration. Less than a week later, World Liberty amended its disclosure, Sun said. The revised filing listed 22 entities in the ownership chain and identified citizenship in Florida, Delaware, Puerto Rico and the UAE. That sequence — an expanded filing arriving days after the ruling on where claims would be heard — is central to Sun's argument.

Coinvo described the change in a post on X:

BREAKING: 🇺🇸🇦🇪 Justin Sun is moving to sanction World Liberty Financial, alleging the project hid its UAE citizenship to escape his $45M fraud suit. Its ownership disclosure flipped from one Florida owner to 22 across four jurisdictions, days after a judge signaled his case… pic.twitter.com/b2cvWx8hPA — Coinvo (@Coinvo) November 4, 2026

X post: https://x.com/Coinvo/status/2117867942830362632?ref_src=twsrc%5Etfw

Sun argues that World Liberty should have disclosed its foreign ownership at the beginning of the case. He says his lawyers spent months and hundreds of thousands of dollars opposing the company's request for arbitration.

“World Liberty was proudly American when it was selling tokens,” Sun wrote on X. “It discovered its UAE roots only when it needed a way out of an American federal courtroom.”

According to Sun, World Liberty's lawyers have said they learned about the UAE citizenship after the original ownership disclosure had been filed.

Jurisdiction dispute

Federal courts generally cannot hear certain cases under diversity jurisdiction when foreign citizens are present on both sides of a dispute. For these purposes, a company takes on the citizenship of its owners.

Sun is a foreign citizen, and he says World Liberty's UAE ties could prevent the case from remaining in federal court. World Liberty is now arguing that the federal court lacks jurisdiction. Sun plans to refile his lawsuit in California state court after the sanctions motion is resolved.

The distinction matters for visibility as well: claims that remain in federal court proceed through open filings and hearings, while the claims sent to arbitration play out privately.

The allegations remain disputed. The court has not ruled that World Liberty intentionally concealed its ownership or that the company made the disclosure in bad faith.

Sun's investment and the token dispute

Sun was one of World Liberty's earliest and largest investors. In November 2024, he agreed to purchase $30 million worth of WLFI tokens and later increased his total investment to $45 million.

World Liberty, which has close ties to President Donald Trump and his family, launched in October 2024 — shortly before Sun's first purchase. The relationship between Sun and the company later deteriorated. Sun alleges that World Liberty froze his tokens and prevented him from using assets he had purchased.

World Liberty has defended its decision to freeze the tokens. In May, the company countersued Sun and called his lawsuit a “meritless PR stunt.” The company could not be reached for comment on Sun's latest claims.

The WLFI token reached an all-time high of about $0.33. It now trades near $0.051, giving it a fully diluted valuation of about $5.1 billion.

With the sanctions motion pending, the court's ruling will set the timeline for Sun's planned refiling in California state court — the next procedural turn in a case that has already been split between public court and private arbitration.

Primary X references: https://x.com/worldlibertyfi?ref_src=twsrc%5Etfw, https://x.com/hashtag/WLFI?src=hash&ref_src=twsrc%5Etfw, https://x.com/hashtag/USD1?src=hash&ref_src=twsrc%5Etfw, and

Source: https://coincentral.com/justin-sun-asks-court-to-sanction-world-liberty-financial-over-late-uae-disclosure/