Justin Sun is filing a motion to sanction World Liberty Financial for hiding its UAE citizenship until months after he sued them.
Backstory: Sun invested $45M in $WLFI tokens (started at $30M, later increased). He sued in April for fraud and token freeze violations.
The legal trick: Federal courts require "diversity jurisdiction" — foreign plaintiffs can sue US defendants, but not foreign ones. A company inherits citizenship from all its owners. So if any owner is foreign, the whole entity is foreign.
World Liberty initially filed disclosure listing only itself as a Florida entity. Its lawyers certified they knew of no other parties to disclose.
After months of expensive litigation and a hearing where the court ruled some claims stay in court (not all go to arbitration), World Liberty suddenly "corrected" its disclosure. Now it lists 22 entities across Florida, Delaware, Puerto Rico, and UAE.
Their new claim: Federal court has no jurisdiction because both sides have foreign parties now.
The irony is brutal. World Liberty's "Goldpaper" explicitly marketed itself as "not offshore by design," a "US-based, taxpaying company" bringing DeFi "back to its true home: America." They sold tokens wrapped in American flag rhetoric.
Now they're claiming UAE citizenship to dodge US federal court.
Sun's lawyers are asking: Did World Liberty's counsel fail to do basic due diligence, or did World Liberty lie to its own lawyers? World Liberty refuses to answer.
Sun says he'll refile in California state court after the sanctions ruling. He's pushing for transparency because token holders deserve to know if the project lied to courts and investors.
This isn't just legal drama — it's about whether crypto projects can market themselves as "proudly American" then pull citizenship switches when lawsuits hit.
Backstory: Sun invested $45M in $WLFI tokens (started at $30M, later increased). He sued in April for fraud and token freeze violations.
The legal trick: Federal courts require "diversity jurisdiction" — foreign plaintiffs can sue US defendants, but not foreign ones. A company inherits citizenship from all its owners. So if any owner is foreign, the whole entity is foreign.
World Liberty initially filed disclosure listing only itself as a Florida entity. Its lawyers certified they knew of no other parties to disclose.
After months of expensive litigation and a hearing where the court ruled some claims stay in court (not all go to arbitration), World Liberty suddenly "corrected" its disclosure. Now it lists 22 entities across Florida, Delaware, Puerto Rico, and UAE.
Their new claim: Federal court has no jurisdiction because both sides have foreign parties now.
The irony is brutal. World Liberty's "Goldpaper" explicitly marketed itself as "not offshore by design," a "US-based, taxpaying company" bringing DeFi "back to its true home: America." They sold tokens wrapped in American flag rhetoric.
Now they're claiming UAE citizenship to dodge US federal court.
Sun's lawyers are asking: Did World Liberty's counsel fail to do basic due diligence, or did World Liberty lie to its own lawyers? World Liberty refuses to answer.
Sun says he'll refile in California state court after the sanctions ruling. He's pushing for transparency because token holders deserve to know if the project lied to courts and investors.
This isn't just legal drama — it's about whether crypto projects can market themselves as "proudly American" then pull citizenship switches when lawsuits hit.