
Sun said a federal judge blocked WLF's arbitration bid. WLF said no order was issued. The public docket shows nothing from the hearing. The dispute goes to the core of stablecoin freeze power.
Justin Sun told millions of followers on social media that his lawyers won a key hearing in federal court in California. According to the Tron founder, the judge rejected World Liberty Financial's bid to move the case to private arbitration and keep court documents sealed. He called the outcome "an important victory."
Zach Witkoff, WLF's co-founder, responded hours later. He called Sun's post "riddled with falsehoods" and said the court issued no order at all. Witkoff claimed the judge confirmed that several of Sun's company claims should go to arbitration and that his own lawyers agreed.
The public docket for Sun et al. v. World Liberty Financial LLC, case 3:26-cv-03360-JD before Judge James Donato in the Northern District of California, shows no orders from the August 20 hearing. WLF filed its arbitration motion on June 2. The hearing was scheduled for that date. Neither version can be verified from the public record alone.
The fight is not just about process. Sun accused WLF of illegally withholding $45 million in tokens after he rejected an additional $200 million investment. WLF says the withholding was security-related, triggered by suspicious on-chain activity and a signed Token Unlock Agreement.
The central question is whether a stablecoin issuer can freeze wallets unilaterally. WLF's USD1 is live on at least eight blockchains, with roughly $1.5 billion on Ethereum and $1.4 billion on BNB Chain, according to DefiLlama. A ruling on that power will affect every user holding the stablecoin.
WLF also recently delayed plans to sell a digital token tied to a Trump-branded resort in the Maldives, Bloomberg reported. Sun has been fighting compliance questions himself, calling reports of HTX-linked wallet transfers "fabricated."
The next court date is not yet set. Until the docket shows an order, the dispute stays a battle of competing claims.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.