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Judge rejects arbitration bid, keeping Sun’s World Liberty claims in court

The case follows OCC preliminary conditional approval for World Liberty Trust Company, which cannot start issuing USD1 until pre-opening requirements are met.

Reported · Written up by our desk · Regulation

Justin Sun said Aug. 20 that a California federal judge rejected World Liberty Financial’s effort to move all claims into private arbitration, leaving Sun’s individual allegations in the public court docket, according to CryptoSlate. Court filings show World Liberty asked to compel arbitration and also sought to seal case materials, the outlet reported. CryptoSlate said the dispute comes about six days after the Office of the Comptroller of the Currency granted preliminary conditional approval for World Liberty Trust Company, a national trust bank intended to take over issuance and reserves for USD1.

The OCC approval remains preliminary, and the trust bank cannot commence operations until it satisfies pre-opening requirements, with the regulator reserving the right to modify, suspend, or rescind approval before final authorization if an intervening event warrants it, the report said. CryptoSlate added that the OCC document states the bank will not issue, custody, or deal in WLFI tokens.

CryptoSlate said the underlying litigation centers on how World Liberty exercised control over WLFI tokens, tracing back to September 2025 when World Liberty restricted Sun-linked WLFI holdings as tokens moved toward exchanges. It also noted that administrative powers used in Sun’s personal dispute had previously reached exchange-linked customer funds connected to HTX, which later delisted USD1 and converted balances into USDT, raising questions that remain visible as the arbitration fight plays out in court.

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