Good morning—this morning I came to update on a big case in the crypto world
Justin Sun vs World Liberty Financial (WLFI)
Most recently, Justin Sun won the first round in court!!
On Aug 20, his lawyer went to appear in a federal court in California
To oppose WLFI’s request to move the case to closed-door arbitration proceedings and to have documents sealed so the public cannot see them
As a result, the court said “no”
In short, it’s basically:
- Justin’s personal case will proceed in open court
- The court did not allow the entire case to be moved to closed-door arbitration
- Both sides need to go back and discuss which issues should be kept in court and which should be separated out
The sentence Justin said was quite clear
“If you do things the right way, why try to hide it this much?”
In his post, Justin stated that
- He invested with WLFI for 45 million dollars
- One of the major investors, who came in from the early stage
- His support helped the project raise up to 550 million dollars
- But later, concerning issues were found with the smart contract of $WLFI
- Alleging that there is a backdoor that could allow the team to freeze or burn token holders’ tokens
- He stated that his token is controlled through this mechanism
- And he also claimed that a similar backdoor was included in USD1
In addition, Justin also mentioned issues related to liquidity, revolving borrowing, and the project’s transparency risks
In summary, this isn’t just drama between a celebrity and a big project
But it’s a crucial question in the crypto industry:
How much control should the project creator have over users’ tokens?
For me, if Web3 is really going to grow
Smart contract issues, token holder rights, and transparency must be clear from the start
Justin concluded by saying that investors should be very cautious about $WLFI and USD1
This case is definitely worth keeping an eye on, folks 👀
