Crypto News: Justin Sun Wins Procedural Battle Against World Liberty Financial

Justin Sun has secured a procedural win in his legal dispute with World Liberty Financial (WLFI). A California federal judge rejected the company’s attempt to move Sun’s individual claims into confidential arbitration.

Judge James Donato ruled that Sun’s personal claims can remain in public court. The decision does not determine whether Sun’s allegations are valid. However, it means his claims will continue through the court system, rather than being handled entirely behind closed doors.

Sun Alleges WLFI Restricted His Tokens

Sun claims he invested $45 million in WLFI. Furthermore, he alleges that the project’s smart contracts give it the ability to freeze, restrict or burn tokens.

He said, “Token holders deserve to see how projects treat the people who trust them.”

He claims those controls were used against his wallet. He has also raised concerns about similar functions in USD1, WLFI’s stablecoin.

He said, “World Liberty has given itself the technical ability to freeze or destroy their assets at any time,” 

Sun has described these features as “backdoor functions.” He is alleging they could allow token holdings to be frozen or destroyed without notice.

He has also questioned whether WLFI has enough funds to cover potential claims. Sun argues that the assets backing USD1’s reported $4 billion market capitalization belong to users. Therefore, they should not be treated as company capital available to pay potential judgments.