Judge Rules Justin Sun’s Lawsuit Against World Liberty Financial Stays in Public Court

Justin Sun’s Legal Battle Against World Liberty Financial Continues in Public Court

A federal judge in San Francisco has ruled that Justin Sun’s personal claims against World Liberty Financial will remain in public court. The judge also ordered both sides to negotiate which claims from Sun’s corporate entities should go to private arbitration instead.

The case centers on World Liberty Financial’s decision to freeze 600 million of Sun’s tokens in September 2025. Sun alleges the company added a hidden feature to its token contract that allowed it to blacklist wallets without warning or a vote.

Key Details of the Ruling

• The judge rejected World Liberty Financial’s request to move all claims to private arbitration.
• Justin Sun’s personal claims will stay in open court, where records are public.
• Claims from Sun’s two corporate entities may still go to private arbitration, but the parties must negotiate which ones.
• No written court order has been filed yet, so Sun’s public statements are the only account of the ruling.

Why the Dispute Started

Justin Sun, the founder of the TRON blockchain, invested $45 million in World Liberty Financial’s WLFI token. He bought 3 billion tokens—$30 million in November 2024 and $15 million in January 2025—and received another 1 billion as compensation for advising the project.

In August 2025, World Liberty Financial changed its token contract to add a blacklist function. This feature let the company freeze tokens in any wallet without telling token holders. Days later, the company used this function to freeze 600 million of Sun’s tokens, which were scheduled to become tradable on September 1, 2025.

World Liberty Financial said it blacklisted 272 wallets over several days, including 79 tied to a phishing attack and one suspected of misusing funds. Sun claims the company falsely accused him of wrongdoing, leading to a defamation lawsuit.

What the Legal Filings Say

World Liberty Financial argued that Sun’s corporate entities, not Sun himself, signed agreements requiring disputes to go to private arbitration. The company’s lawyers said the claims should be handled confidentially under arbitration rules.

Sun’s legal team countered that the first token purchase agreement included a clause requiring disputes to stay in public court. They also accused World Liberty Financial of giving up its right to arbitration by suing Sun for defamation in a Florida court.

What Is Confirmed

• A federal judge ruled that Justin Sun’s personal claims will remain in public court.
• The judge ordered both sides to negotiate which corporate claims should go to private arbitration.
• World Liberty Financial froze 600 million of Sun’s WLFI tokens in September 2025 using a blacklist function added to the token contract.
• Sun’s lawsuit includes claims of breach of contract, fraud, and defamation.

What Is Still Unclear

• No written court order has been filed, so the exact details of the judge’s decision are not yet public.
• It is unclear which corporate claims will go to arbitration and which will stay in court.
• World Liberty Financial has not publicly responded to the ruling.

Why This Case Matters

The ruling could set a precedent for how disputes involving token contracts are handled. If companies can freeze tokens without warning, it may affect how investors trust crypto projects. The case also highlights the tension between private arbitration and public court proceedings in crypto-related lawsuits.

Sources

• The Defiant
• Justin Sun’s X post
• Court docket for Sun v. World Liberty Financial LLC