Justin Sun Says Court Rejected WLFI’s Secret Arbitration Bid, Claims Will Stay Public

Justin Sun said a U.S. federal court in California rejected World Liberty Financial’s bid to move the dispute into secret arbitration and keep the filings out of public view. In a post on social media on Aug. 21, Sun said his legal team attended the hearing to oppose WLFI’s move. According to Sun, the court ruled that all of his personal claims will remain in open court. The judge also denied World Liberty’s request that all company-related claims be sent to arbitration, and ordered both sides to work together to determine which claims stay in court and which go to arbitration. Sun called the ruling a “major victory” and said token holders have the right to know how a project handles investor interests. He said he was one of World Liberty’s earliest and largest investors, and that he had spent $45 million to buy WLFI tokens. Sun also accused the project of inserting a backdoor into the WLFI smart contract after his investment helped World Liberty complete about $550 million in fundraising. He said that setup would allow the project team to freeze, restrict or destroy token holders’ assets on its own. Sun said World Liberty had taken related action against his WLFI tokens and had threatened criminal referral when he sought legal remedies. He said the claims against World Liberty now amount to hundreds of millions of dollars. He also said he learned that World Liberty’s USD1 stablecoin may have a similar function, and warned users to pay attention to any freeze or burn permissions tied to those assets. Sun further questioned World Liberty’s treasury position and business arrangements. Citing public information, he said World Liberty had deposited about 5 billion WLFI tokens on the lending platform Dolomite as collateral and borrowed at least $75 million in stablecoins, including USD1. He said those arrangements may carry risk.