Protocols & Policy · Crypto litigation
Justin Sun and two companies asked a federal judge in San Francisco to sanction World Liberty Financial and award $263,821.20 in fees over its disclosures about who owns it. The court has not ruled.
Justin Sun and two companies are asking a federal judge to make World Liberty Financial pay $263,821.20 of their legal bills, arguing that the crypto company's first disclosure of its owners was "plainly false" [1]. The plaintiffs, Yuchen "Justin" Sun, Blue Anthem Limited and Black Anthem Limited, filed the motion for sanctions on Nov. 2 in the U.S. District Court for the Northern District of California, case No. 3:26-cv-03360, before Judge James Donato [1].
A sanctions motion asks a court to penalize a party or its lawyers for conduct in the case. It is a request; the court has not ruled.
The dispute is about jurisdiction, the court's power to hear the case. The plaintiffs sued in federal court on April 21, relying "solely on diversity of citizenship," a rule that lets federal courts hear cases between parties from different states or countries [1]. That depends on where each party is a citizen, and for a limited liability company, the motion says, citizenship follows "each of its members" [1].
According to the motion, World Liberty Financial first filed a disclosure "disclosing only one entity in its entire membership chain and claiming to be a citizen of only Florida." On Aug. 26, it filed a supplement identifying "22 persons and entities," with citizenship including "Delaware, Puerto Rico, and the United Arab Emirates," which the plaintiffs say "means that this Court would lack subject matter jurisdiction" [1]. The plaintiffs say they will have to refile in California state court [1].
They ask for sanctions under "the Court's inherent sanctions power and 28 U.S.C. § 1927," a statute that lets courts make lawyers pay costs for "unreasonably and vexatiously" multiplying proceedings, and argue the conduct also violated Federal Rule of Civil Procedure 11, though they say they "do not move under Rule 11(c)(2)" [1].
| Item | Per the motion |
|---|---|
| Fees and costs requested | $263,821.20 |
| Covers | Opposing World Liberty Financial's motion to compel arbitration, a request to move the case out of court to a private arbitrator, including the Aug. 20, 2026 hearing |
| Lawyers counted | Four, from Cahill Gordon & Reindel LLP |
| Members disclosed, first vs. supplement | One entity vs. 22 persons and entities |
| Hearing noticed | Dec. 10, 2026, 11:00 a.m. Pacific (2:00 p.m. ET), Courtroom 11, San Francisco |
Table: Le Coin. Source: ECF No. 70.
The motion calls the figure "under-inclusive," saying it counts only "the core team working on this task—four lawyers from Cahill Gordon & Reindel LLP," and excludes work by other lawyers, later discovery and the sanctions motion itself [1]. The motion does not state hours or hourly rates.
| Date | Event |
|---|---|
| April 21, 2026 | Complaint filed |
| June 2, 2026 | World Liberty Financial moves to compel arbitration and dismiss; files initial disclosure |
| Aug. 20, 2026 | Hearing on the arbitration motion |
| Aug. 26, 2026 | Supplemental disclosure filed |
| Nov. 2, 2026 | Sanctions motion filed |
| Dec. 10, 2026 | Hearing noticed by the plaintiffs |
Table: Le Coin. Source: ECF No. 70.
This is one side's filing. The motion itself says World Liberty Financial's lawyers "assert that they discovered" the company's UAE citizenship "only after the initial false filing" [1]. Any response from World Liberty Financial would come in its own papers, which Le Coin has not seen.
In Le Coin's view, the fee request is a side dispute over a routine court filing: the list of who owns a company. By the plaintiffs' account, a one-entity disclosure became a 22-entry one, and that change would leave the federal court without jurisdiction.
Holding the Corner.
Not financial advice.