A federal judge in California has refused to send all of Justin Sun’s claims against World Liberty Financial into private arbitration, keeping part of a closely watched token dispute in open court. Sun, who bought $45 million worth of WLFI tokens, said he had won a first round after the August 20 hearing.
That ruling matters because Sun brought the case in federal court in San Francisco in April and has argued that his claims should not disappear into a private process. He has said his personal claims would remain publicly reviewed before the federal court, even as World Liberty Financial pressed to move the fight out of public view.
The dispute centers on frozen tokens and the control powers World Liberty would have integrated into the WLFI contract. On June 2, the company asked Judge James Donato to force the plaintiffs into arbitration and suspend the court case, with Blue Anthem Limited and Black Anthem Limited also named in the complaint. The hearing on that request took place on August 20, but the written order was not yet publicly available.
What the judge kept in court, and what, if anything, may still be sent to arbitration, remains unresolved from the public record now available. That gap matters because it leaves open how much of Sun’s challenge will be aired before a judge and how much could still be decided behind closed doors.
The case also lands just days after the Office of the Comptroller of the Currency gave preliminary conditional approval on August 14 to World Liberty Trust Company, which is set to resume issuing USD1 and would take over issuing, redeeming and managing the stablecoin’s reserves from BitGo if it clears the OCC’s conditions. But the approval does not extend to WLFI itself, and the bank cannot start operations until it meets requirements including at least $20 million in Tier 1 capital, enough liquid assets to cover 180 days of expenses and advance notice to the regulator before major business changes.
For now, the practical result is that Sun has avoided a complete move into private arbitration, while World Liberty Financial has not yet secured the full courtroom exit it sought. The next step depends on the judge’s written order, which will determine whether the public case narrows or stays broad enough to keep the core dispute in view.
