The crypto world is once again caught in a legal whirlwind. First Digital Trust (FDT), a Hong Kong-based custodian, has filed a defamation lawsuit against Justin Sun, the founder of Tron, over his claims that the company is insolvent.
🔹 What happened?
Justin Sun initially posted on X (formerly Twitter), stating that First Digital was insolvent after allegedly transferring over $450 million in client assets to a private company in Dubai without authorization, and failing to return the funds.
The post triggered panic – the FDUSD stablecoin, associated with FDT, briefly depegged to $0.87 on April 3. It has since recovered.
Sun then held a press conference in Hong Kong, accusing the firm of financial fraud and violating Hong Kong securities laws.
🔹 FDT: “We take this seriously.”
FDT responded swiftly by filing a defamation suit in the High Court of Hong Kong (case HCA 680), requesting the court to:
🔹 Ban Sun from making further similar claims,
🔹 Order a public retraction,
🔹 And award damages for business disruption and harm to reputation.
In an official statement, FDT vehemently denied all allegations of fraud or mismanagement. The company stressed that FDUSD remains fully backed, redeemable, and FDT is solvent.
🔹 Sun remains silent, but welcomes legal action
While Sun hasn’t responded directly to the lawsuit, he posted on X saying he welcomes any legal steps. His spokesperson has so far declined to comment.
FDT also accused Justin Sun and Techteryx (the issuer of TrueUSD) of trying to shift blame for poor TUSD reserve management onto them.
🔹 FDT: Our position is strong, FDUSD is resilient
The company noted that although FDUSD briefly lost its peg, it has now recovered. FDT has redeemed nearly $26 million in stablecoins and claims to have no liquidity or solvency issues.
“The suggestion that we are insolvent is not only false but a malicious attempt to damage our reputation and market standing,” the firm stated.
📌 Summary:
Justin Sun accused FDT of insolvency → FDUSD briefly depegged.
FDT is suing for defamation, seeking a gag order, retraction, and damages.
The company insists everything is stable and the allegations are false and harmful.
Sun is holding his ground, but has yet to make an official legal response.
🟡 No date has been set for the first hearing, but this case is shaping up to be both a legal and reputational showdown.
#JustinSun , #CryptoNewss , #Tron , #Stablecoins , #crypto
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