Justin Sun: Court Rejects WLFI's Confidential Arbitration Request, Claims to Proceed in Open Court

August 21 — Justin Sun stated on social media that his lawyers appeared in the U.S. District Court for the Central District of California to oppose World Liberty Financial's (WLFI) attempt to move the dispute into confidential arbitration and seal documents. The court ruled in his favor, determining that all his individual claims will proceed in open court, and rejected WLFI's request to compel all corporate-related claims into arbitration, requiring both parties to negotiate which claims remain in court or proceed to arbitration.

Sun called this a "major victory" and stated that token holders have the right to know. He said he was one of WLFI's earliest and largest investors, having invested $45 million to purchase WLFI tokens. Sun alleged that after he helped WLFI raise approximately $550 million, the project embedded backdoors in its smart contracts allowing unilateral freezing, restriction, or destruction of tokens; WLFI had taken action against his tokens and threatened criminal referral, and his claims against WLFI now total several hundred million dollars.

He also stated that similar functionality was discovered in the USD1 stablecoin, warning users to pay attention to the authority to freeze or destroy assets; he also questioned WLFI's capital and business arrangements, noting that public records show WLFI deposited approximately 5 billion WLFI tokens into lending platform Dolomite as collateral and borrowed at least $75 million in stablecoins, which could pose risks.

[BlockBeats]