TRON founder Justin Sun has secured a procedural victory in his legal dispute with Trump family-backed crypto venture World Liberty Financial after a California federal judge rejected the company’s attempt to move his individual claims into private arbitration. The judge also rejected efforts to keep related filings away from public view. The ruling means Sun’s personal claims will remain in open court. However, both sides still need to decide which company-related claims should go to arbitration and which should stay in court.
Today, my counsel appeared in California federal court to oppose World Liberty Financial’s @worldlibertyfi efforts to force our dispute into secret arbitration proceedings and seal documents from public view.
We argued forcefully that this case belongs in open court—and the…
— H.E. Justin Sun 👨🚀 🌞 (@justinsuntron) August 20, 2026
US District Court Judge James Donato in the Northern District of California is hearing the case. Sun welcomed the decision, calling it a major win. He also promised to keep working for what he describes as greater transparency for token owners.
The dispute dates back to Sun’s investment in World Liberty Financial. Sun says he invested $45 million in the project in return for $WLFI tokens and that his investment helped turn a struggling token sale into a $550 million fundraising round.
His lawsuit alleges that World Liberty later used features built into the $WLFI smart contract to freeze, restrict or burn tokens held by investors. Sun claims those powers were used against his holdings. He is requesting damages totaling hundreds of millions of dollars.
In addition to contesting Sun’s allegations, World Liberty has sued him for defamation in Miami, claiming that he ran a public campaign against the business.
The latest ruling does not determine whether World Liberty acted illegally. Its significance is procedural. By keeping Sun’s individual claims in open court, the decision means future filings and evidence related to those claims could be subject to public scrutiny.
Sun has also raised concerns about World Liberty’s USD1 stablecoin. He alleges that the stablecoin contains similar technical powers that could allow the issuer to freeze or destroy tokens. These are allegations made by Sun and have not been established by the court.
USD1 has grown into a major part of World Liberty’s business. The stablecoin has expanded to additional blockchain networks, while World Liberty has been pursuing greater institutional use of the token.
Sun has also questioned World Liberty’s financial arrangements. His statement referred to reports that the project deposited a large amount of $WLFI tokens as collateral on the Dolomite lending platform and borrowed stablecoins against them.
He argued that such arrangements raise questions about the project’s financial position and its ability to meet potential legal obligations. Again, these are claims and concerns raised by Sun rather than findings established by the court.
The case also brings renewed attention to World Liberty’s earlier involvement in the DeFi sector and the history of some people associated with the project. Sun has pointed to allegations surrounding Dough Finance, another DeFi project linked to members of the World Liberty team. Those allegations remain separate from the current court ruling.
For now, the legal battle is far from over. The latest decision simply means that at least some of Sun’s claims will continue in public court rather than being moved entirely behind closed doors.
That could make the coming stages of the case particularly important for investors and token holders. More documents and arguments could emerge as the dispute moves forward, potentially putting greater attention on the governance, token controls and financial arrangements surrounding World Liberty Financial and USD1.
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