First Digital Trust Files Defamation Lawsuit Against Justin Sun
First Digital is seeking an injunction to prevent Sun from publishing “statements akin to insolvency claims.”
Sam Reynolds | Edited by Aoyon Ashraf, Nikhilesh De, April 9, 2025, 5:09 PM
Key facts:
- First Digital Trust has filed a defamation lawsuit against Justin Sun after he claimed the company was insolvent.
- First Digital's FDUSD stablecoin briefly lost its peg to the exchange rate, but then recovered after Sun's comments.
Justin Sun's allegations that Hong Kong custody bank First Digital Trust is insolvent have prompted the company to file a defamation lawsuit.
First Digital's FDUSD stablecoin briefly veered off course on April 3 after Sun claimed the company was “insolvent,” but has since recovered, according to CoinDesk.
The summons, the first step in the defamation suit, was filed late last week and asks Hong Kong's High Court to prevent Sun from making further statements on the matter. It also asks for an injunction requiring Sun to issue a retraction.
The lawsuit also contains a demand to the court for compensation for damages (the amount is not specified) for “unlawful interference in the contractual and business relations of the plaintiff” and “harm to the plaintiff’s business.”
After Sun first announced First Digital's insolvency on the X platform, the Tron founder stepped up his stance by holding a press conference in Hong Kong late last week where he accused the company of fraud and called on regulators to reform rules around trusts.
For its part, First Digital presented examples of successful repayments.
The date of the first court hearing has not yet been set. Sun has not yet filed a response, but in his message to X he expressed his readiness for any trial.
A representative for Sana declined to comment on the situation.
The case number in the High Court of Hong Kong is HCA 680.
