Justin Sun’s allegations that the Hong Kong-based custodian First Digital Trust is insolvent have led to a defamation lawsuit initiated by the company.

First Digital’s FDUSD stablecoin briefly de-pegged on April 3 after Sun’s announcement of insolvency, although it has since recovered according to CoinDesk markets data.

The writ of summons—the initial step in a defamation case—was filed last week, requesting the Hong Kong High Court to issue an injunction preventing Sun from making further statements on this issue. It also requests Sun to publish retractions.

This lawsuit seeks damages for “unlawful interference with the Plaintiff’s contractual and business relationships” and for “causing damage to the Plaintiff’s business.”

Since Sun’s original claim on X regarding First Digital’s alleged insolvency, he has reiterated his stance, holding a press conference in Hong Kong, accusing fraud and requesting regulatory reforms concerning trust companies.

First Digital has provided evidence of successful transactions occurring despite these allegations. An initial court hearing date is yet to be determined, and Sun has not yet presented a legal response, although he stated he “welcomes any legal process.” A spokesperson representing Sun declined to comment on the situation.

The case number assigned is HCA 680 in the Hong Kong High Court.