Hardware Ready Ready to Bench?
On November 3, 2026, Justin Sun, founder of the Tron platform, submitted a formal request to the U.S. District Court for the Northern District of California. The objective is to obtain sanctions against World Liberty Financial (WLFI) and its legal counsel for delaying the disclosure of the company’s ties with the United Arab Emirates. According to Sun, this omission could invalidate the jurisdiction of the American federal court over the ongoing case.
Why it matters
The legal dispute concerns a $45 million investment and allegations of fraud, breach of contract, and illegal freezing of tokens. The central issue is jurisdictional: U.S. federal law requires that the parties in the case are not all foreign to ensure access to district court. World Liberty Financial initially declared itself to be a Florida company with a single member, but subsequently corrected its disclosure by listing 22 entities with citizenships spanning Florida, Delaware, Puerto Rico, and the United Arab Emirates.
Justin Sun argues that the company presented itself as an American enterprise during token sales, revealing its UAE ties only during the legal proceedings. Zach Witkoff, co-founder and CEO of WLFI, rejected the accusations, defining Sun’s lawsuit as an attempt to distract from his own irregularities. The company also maintains that the powers to freeze tokens were already indicated in the original terms of sale.
The numbers
The amount at stake in the federal case is $45 million, a figure confirmed by multiple sources. Sources diverge on the initial commitment: Unchained reports an agreement in November 2024 for $30 million, while CryptoSlate and The Cryptonomist indicate Sun’s total investment at $45 million. World Liberty Financial revealed the presence of 22 entities in its updated ownership structure, compared to the single member initially declared. Furthermore, according to reports cited by CryptoSlate, a 49% stake in the company is controlled by entities linked to Tahnoon bin Zayed Al Nahyan.
What remains to be understood
Judge James Donato must decide whether the omissions in the citizenship disclosure justify penalties against the company or its lawyers. It is not yet clear which of WLFI’s 22 members is specifically a citizen of the United Arab Emirates, given that Unchained could not verify the full text of the legal filings through free public services. Additionally, it remains to be established whether federal court jurisdiction should be transferred to California state court, as suggested by Sun’s lawyers in case foreign ties are confirmed on both sides of the lawsuit.
Sources: CoinDesk, Decrypt, Unchained, CryptoSlate, The Cryptonomist.
This article is for informational purposes only and does not constitute financial advice or an investment recommendation.
* Content created with the assistance of artificial intelligence systems.