# Justin Sun lawsuit against World Liberty Financial > Live situation record from CLSTR: https://clstr.news/situations/justin-sun-lawsuit-against-world-liberty-financial > Updated: 2026-08-23T03:00:04.000Z. Sources: 17. Developments: 2. Justin Sun, the founder of TRON, filed a lawsuit against World Liberty Financial (WLF) alleging the company utilized a smart contract ‘backdoor’ to freeze, restrict, or burn his $WLFI tokens. Sun, an early investor who contributed $45 million, also raised concerns regarding administrative controls within the USD1 stablecoin that could allow operators to move funds without user consent. In a California federal court, Sun secured a procedural victory when U.S. District Judge James Donato rejected WLF’s attempt to move the entire dispute into private, confidential arbitration. While the court has ordered both parties to negotiate which specific corporate claims might move to arbitration, Sun’s individual claims will proceed in open court. WLF co-founder Zach Witkoff has disputed Sun’s characterization of the proceedings, claiming Sun’s statements are ‘riddled with falsehoods.’ The ruling does not resolve the core allegations of fraud or misconduct. ## Timeline ### 2026-08-23: Justin Sun sues World Liberty Financial over alleged smart contract backdoor TRON founder Justin Sun is suing World Liberty Financial, alleging a smart contract backdoor allows the company to unilaterally freeze or burn tokens, including his own $45 million investment. 5 sources. https://clstr.news/cluster/justin-sun-sues-world-liberty-financial-over-alleged-smart-contract-backdoor ### 2026-08-20: Justin Sun wins procedural victory in World Liberty Financial lawsuit A California federal judge ruled that Justin Sun’s individual claims against World Liberty Financial will remain in public court, rejecting an attempt to move the dispute into private arbitration. 14 sources. https://clstr.news/cluster/justin-sun-wins-partial-court-victory-in-world-liberty-financial-dispute --- Cite as: Justin Sun lawsuit against World Liberty Financial. CLSTR, https://clstr.news/situations/justin-sun-lawsuit-against-world-liberty-financial