Overview
- U.S. District Judge James Donato on Thursday rejected World Liberty Financial’s effort to move Justin Sun’s individual claims into private arbitration, so those claims will remain in open federal court.
- The court ordered both sides to meet and identify which company-related claims should stay in court and which should be sent to arbitration, with the judge ready to resolve any disputes if they cannot agree.
- Sun’s complaint says World Liberty built hidden administrative controls into the WLFI token contract that let the project freeze, restrict, or burn holders’ tokens and that similar controls exist in the USD1 stablecoin.
- Sun has raised fresh concerns about World Liberty’s ability to satisfy a large judgment, noting that USD1’s reported roughly $4 billion market cap reflects user collateral rather than corporate cash and pointing to large WLFI deposits to a lending platform called Dolomite.
- Parallel litigation continues: Sun won a court order blocking World Liberty from disposing of the disputed tokens and World Liberty has filed a defamation suit in Florida, so the next steps will focus on the parties’ arbitration talks and any further court filings.