Justin Sun claims to have won a first round against World Liberty Financial. On August 20, a federal judge in California reportedly refused to send all of his claims to private arbitration. A decision which comes just a few days after the conditional green light granted by the OCC to World Liberty Trust Company, called to resume the issuance of the USD1 stablecoin.
In brief
- According to Justin Sun, Judge James Donato refused to submit all of his claims to private arbitration, keeping his individual claims in federal court.
- The OCC on August 14 granted conditional preliminary approval to World Liberty Trust Company, which plans to take over the issuance of USD1 and management of its reserves from BitGo.
- The fate of the applications filed by Blue Anthem and Black Anthem remains to be determined. The written order for the August 20 hearing was not yet publicly available at the time of writing.
Justin Sun obtains the maintenance of part of the case in court
The standoff between Justin Sun and World Liberty Financial has been going on for several months. The Tron founder, who purchased $45 million worth of WLFI tokens, brought the case to a federal court in San Francisco in April.
This dispute between WLFI and Justin Sun concerns in particular the freezing of its tokens and the control powers that World Liberty would have integrated into the WLFI contract.
On June 2, World Liberty Financial asked Judge James Donato to compel the plaintiffs to go to arbitration and stay the legal proceedings. The hearing on this application was held on August 20.
At its conclusion, Sun said his personal claims would remain publicly considered in federal court. Clearly, World Liberty would not have obtained the transfer of the entire dispute to a private procedure.
This distinction matters. Indeed, arbitration generally makes it possible to resolve a conflict outside of public hearings and with much more limited visibility on the documents exchanged.
However, nothing has yet been decided on the merits. Blue Anthem Limited and Black Anthem Limited, two companies also parties to the complaint, are making their own claims. Their treatment remains under discussion. Importantly, the judge’s written order was not yet publicly available as of this writing.
World Liberty is simultaneously preparing its bank for USD1
The calendar adds another dimension to the file. On August 14, six days before the hearing, the Office of the Comptroller of the Currency granted conditional preliminary approval to World Liberty Trust Company.
The future national fiduciary bank must notably take charge of the issuance and redemption of USD1, as well as the management of its reserves. It plans to take over these activities from BitGo, which currently fulfills this role.
But World Liberty Trust cannot yet start operations. Final authorization depends on compliance with several conditions imposed by the OCC.
In particular, the bank must have at least $20 million in Tier 1 capital. It must also maintain sufficient liquid assets to cover 180 days of operational expenses and inform the regulator before any significant change to its business model.
The OCC also retains the possibility of modifying, suspending or withdrawing its preliminary agreement before the actual opening of the establishment.
Another element of the document deserves attention : World Liberty Trust will not be able to issue, hold or trade WLFI tokens. The OCC specifies, however, that World Liberty Financial and the future bank indirectly share certain owners.
On paper, a boundary is therefore clearly drawn between the WLFI token and banking activities linked to USD1.
Previous token freezes fuel questions
This separation comes at a time when the powers of control exercised over certain assets linked to World Liberty are already at the heart of several conflicts.
In June, World Liberty Financial froze certain on-chain addresses associated with HTX as part of a review related to sanctions compliance. The crypto platform contested this decision and suspended several pairs involving WLFI and USD1. It also announced the conversion of its users’ USD1 holdings into USDT.
A few months earlier, in September 2025, Justin Sun himself had seen a significant portion of his WLFI tokens blocked after movements to exchange platforms. It is in particular this episode which led to the current dispute.
The legal battle is not limited to California. World Liberty also sued Justin Sun for defamation and market manipulation in a separate proceeding.
For the moment, none of these procedures allows us to conclude on the merits of the accusations.
The next steps should provide further clarity. On the one hand, Judge Donato’s written order must specify which claims will remain before the courts and which could still be subject to arbitration. On the other hand, World Liberty Trust will have to meet the requirements of the OCC before obtaining its final authorization.
Two distinct files, but the same question in the background: how far does the control exercised within the World Liberty ecosystem extend, as USD1 prepares to enter a federal banking framework reinforced by American legislation on stablecoins?
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