Justin Sun’s claims regarding the insolvency of Hong Kong-based custodian First Digital Trust have put him under the threat of a defamation lawsuit filed by the firm.
The FDUSD stablecoin from First Digital briefly lost its peg on April 3 following Sun’s allegations, although it has since mostly regained its value, as per market data.
The writ of summons, which marks the beginning of the defamation case, was submitted late last week. It urges the Hong Kong High Court to issue an injunction preventing Sun from making further remarks on the issue and compels him to release public retractions.
Additionally, the lawsuit seeks damages for what it describes as “unlawful interference with the Plaintiff’s contractual and business relationships” and for “inflicting damage on the Plaintiff’s business,” though the specific amount of damages has not been disclosed.
Since initially declaring on social media that First Digital was insolvent, Sun has intensified his stance, holding a press conference in Hong Kong last week that accused the company of fraudulent activity and urged local regulators to change trust regulation laws.
In response, First Digital has shared evidence of redemptions being processed.
There has not been a set date for the preliminary court hearing, and while Sun has yet to submit a formal response, he expressed on social media that he is open to any legal procedure. A spokesperson for Sun declined to comment further.
This case is registered as HCA 680 in the High Court of Hong Kong.