Justin Sun’s $45 million dispute with World Liberty Financial (WLFI) will proceed in open court after a federal judge rejected the company’s bid to move the case into private arbitration.

The ruling keeps Sun’s individual claims in the public court process. At the center of the case is Sun’s allegation that WLFI — the Trump family-linked crypto venture launched in 2024 that raised hundreds of millions of dollars through token sales — retained undisclosed contractual powers to freeze, transfer, or burn his 4 billion tokens after they unlocked. Sun says the dispute now turns on a broader question: who ultimately controls digital assets.

Arbitration Bid Fails in Federal Court

The dispute traces back to a reported $45 million investment in WLFI by Sun, the founder of the Tron blockchain, for which he received 4 billion tokens. World Liberty Financial sought to move Sun’s claims into private arbitration and to seal the proceedings. Arbitration is widely used in financial and crypto contracts because it keeps disputes confidential and resolves them through private arbitrators rather than public dockets and juries.

The federal judge rejected that request, allowing Sun’s individual claims to continue publicly. As a result, the contractual terms underlying the dispute can now face scrutiny in open proceedings.

Sun alleges that WLFI secretly retained powers to freeze, transfer, and burn tokens held by users. He also claims those powers lacked disclosure, governance, and a formal process.

Sun Challenges WLFI Over Token Controls

According to Sun, writing on X, the controls became relevant within days after his tokens unlocked. He says WLFI used those contractual powers against his tokens once they became available.

Sun has framed the lawsuit around blockchain ownership rather than only the money involved. He argues that users should control the assets they hold without needing permission from an issuer. That argument rests on the principle “your keys, your coins,” according to Sun, who says an issuer’s ability to confiscate or freeze assets changes the meaning of digital ownership.

Contract-level controls of this kind are not unprecedented in crypto. Major stablecoin issuers, including Tether and Circle, can freeze or blacklist addresses holding USDT and USDC, and both companies document those powers publicly, saying they are used for compliance and law-enforcement reasons. The allegation in Sun’s case is that WLFI’s powers were never disclosed.

Federal Court Keeps Claims Public

Sun is seeking hundreds of millions of dollars in damages from the dispute. However, the latest ruling does not decide whether his allegations are valid. Instead, the decision addresses World Liberty Financial’s attempt to force the claims into arbitration and keep the proceedings sealed. Sun’s individual claims will remain in the public court process.

Sun also says the case could establish a legal precedent for token ownership and issuer controls. He wants the court to address whether “your assets” means actual ownership when contracts grant issuers broad control over those assets. With the venue question decided for now, the case’s next steps — such as WLFI’s formal response to the complaint — would unfold on the public docket rather than in confidential arbitration.

Source: Crypto Front News