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- Sun Yuchen stated that his lawyers have submitted a motion to impose sanctions on the company for the delayed disclosure of the ownership of World Liberty Financial, which has resulted in it acquiring UAE citizenship.
- Sun claimed that World Liberty initially listed only Florida as its sole “citizenship,” later revised its declaration to include 22 members and their connections to the United Arab Emirates, and now argues that federal courts have no jurisdiction over the matter.
- Sun Yuchen claims to have invested $45 million in the WLFI token and plans to resubmit the lawsuit to the California State Court after this issue is resolved.
The legal dispute between Sun Yuchen and World Liberty Financial now hinges on an issue of nationality.
The founder, Tron, stated on X on Tuesday that his lawyer has requested a federal court in California to impose sanctions on an encryption company supported by the Trump family, on the grounds that the company has been slow to disclose its ownership chain, which grants it citizenship of the United Arab Emirates.
Sun said that he is one of the earliest and largest investors in World Liberty. He stated that in November 2024, he agreed to purchase WLFI tokens worth 30 million US dollars, and later increased the total investment amount to 45 million US dollars.
In April this year, Sun sued the company, accusing it of misleading him into making investments, and subsequently his tokens were illegally frozen. World Liberty countered in court, accusing Sun of short-selling WLFI and driving down its price.
The current dispute revolves around a technical issue. Sun chose to file a lawsuit in federal court, which is capable of handling cases involving parties from different regions; however, it generally does not accept cases where foreign plaintiffs sue foreign defendants.
According to Sun, companies like World Liberty inherit the nationality of each of their owners. Therefore, as long as there is one foreign owner, such a company will be considered a foreign company in such cases.
According to Sun, the disclosure documents initially submitted to the court by World Liberty listed only themselves and identified Florida as their sole “citizenship.” During a hearing in August, the judge suggested that some of Sun’s claims should continue to be heard in open court rather than proceed to arbitration.
In less than a week, Sun said that the company revised its disclosure documents, listing 22 members in its ownership chain, who have citizenship in Florida, Delaware, Puerto Rico, and the United Arab Emirates. Sun stated that World Liberty now claims that federal courts do not have jurisdiction over this case based on this information.
Sun believes that this belated disclosure is a strategy to remove the case from federal court. His motion requires World Liberty and its lawyers to bear the related costs. He also compared the company's stance with its own marketing propaganda, citing content from World Liberty where it is described as "an American, tax-paying company."
Sun stated that once the sanctions proposal is resolved, he will resubmit the lawsuit to the California state court. "I will continue to fight for the transparency that this community deserves," he wrote.
This dispute has been publicly ongoing for several months. Sun has criticized the way World Liberty treats investors and alleged that the company once threatened to destroy his WLFI tokens.
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