First Digital Trust, a Hong Kong-based company, has filed a lawsuit against Justin Sun following his claims of insolvency and fraud.
Justin Sun's Allegations
Tron founder Justin Sun made public claims that First Digital Trust was insolvent, holding a press conference in Hong Kong to repeat his allegations of fraud. These claims resulted in a brief de-pegging of the FDUSD stablecoin on April 3.
Actions by First Digital Trust
First Digital Trust filed a defamation lawsuit in the Hong Kong High Court, seeking an injunction to prevent further dissemination of such claims. The company also requested damages, the amount of which was not specified. In its statement, FDT vehemently denied Sun's allegations and asserted that FDUSD remained fully backed.
Reactions and Consequences
Following Sun's accusations, FDUSD dropped to as low as $0.87 but has since recovered, with the company reporting a redemption of nearly $26 million in stablecoins. First Digital Trust reassured customers of its solvency and continued processing redemption requests despite Sun's claims.
The situation between First Digital Trust and Justin Sun continues to evolve, and the legal proceedings could have significant implications for both parties.
