Justin Sun's allegations that Hong Kong-based custodian First Digital Trust is insolvent have landed him in the cross-hairs of a defamation claim initiated by the company.

First Digital's FDUSD stablecoin briefly de-pegged on April 3 after Sun claimed the company was "insolvent," though it has since virtually recovered, according to CoinDesk markets data.

The writ of summons, the first step in a defamation claim, was filed late last week and requests the Hong Kong High Court to issue an injunction restraining Sun from making further statements on the matter. It also asks for an injunction requiring Sun to publish retractions.

It also asks for the Court to issue an award for damages (though it doesn't specify how much) for "unlawful interference with the Plaintiff's contractual and business relationships" and "causing damage to the Plaintiff's business."

In the time since Sun made his first claim on X that First Digital was insolvent, the Tron founder has since doubled down on the issue, holding a press conference late last week in Hong Kong alleging fraud and calling on the territory's regulators to reform rules around trusts.

For its part, First Digital has posted examples of redemptions going through.

A date for an initial court hearing has not been set. Sun has not yet filed a response, but posted on X that he "welcomes any legal process."

A spokesperson for Sun had no comment on the matter.

The case number is HCA 680 in Hong Kong's High Court.

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