Crypto tycoon Justin Sun sues Bloomberg over plans to disclose private cryptocurrency holdings

Justin Sun, the founder of TRON, has filed a federal lawsuit against Bloomberg, alleging a breach of confidentiality agreements and the potential exposure of his sensitive financial data[1][3]. The lawsuit highlights a significant tension in the crypto world between financial privacy and transparency, as Sun's crypto holdings could become targets for theft, hacking, and physical harm if publicly revealed[1][4].

According to the complaint, Bloomberg promised to keep Sun's information strictly confidential during a wealth verification process. However, the lawsuit does not mention any new promises or agreements made by Bloomberg regarding the confidentiality of Sun's crypto holdings[2]. The lawsuit seeks temporary and permanent injunctions preventing Bloomberg from publishing Sun's specific crypto holdings and seeks a jury trial, court costs, and attorney fees[2].

The lawsuit references Bloomberg's own coverage of "wrench attacks," physical violence used to force crypto transfers, noting that public wallet visibility increases the risk of such attacks[3]. This year alone, there have been 51 documented attacks globally, with high-profile incidents including kidnappings in France where victims had fingers severed, and a crypto founder being forced to transfer $500,000 at gunpoint in Uganda[3].

If Sun is coerced, hacked, or scammed out of his crypto funds, there is little or no recourse[3]. Sun's legal team argues that disclosing specific crypto amounts could enable bad actors to identify his wallet addresses through address clustering techniques that analyze transaction patterns[3].

In response to the lawsuit, Bloomberg has reportedly confirmed its intent to publish the information "imminently"[3]. The lawsuit also alleges that Bloomberg plans to break confidentiality promises regarding Sun's crypto holdings[3].

David Gu, General Counsel of LBank, stated that Sun could furnish Bloomberg a zero-knowledge net-worth proof without revealing addresses or positions[2]. This method allows one party to prove possession of a certain amount of cryptocurrency without revealing the specific addresses or positions[2].

The lawsuit has broader implications for how personal financial data in crypto is reported and protected. On one side, media outlets like Bloomberg may argue such disclosures serve public interest by enhancing transparency about wealth held in crypto assets, which are often scrutinized for regulatory and legitimacy reasons[2]. On the other side, high-profile figures like Sun insist on the right to keep sensitive financial details confidential to avoid becoming targets of cybercrime and physical threats[1][4].

This legal battle could influence:

Journalistic practices in crypto reporting: Independent reporters might become more cautious or face legal risks when publishing personal financial information, potentially leading to a chilling effect on investigative reporting within the crypto sector[4].
Privacy norms and protections: If Sun prevails, it could set a precedent for stronger privacy safeguards around crypto holdings, restricting the scope of media disclosures and reinforcing the need for confidentiality agreements in verification processes[4].
Regulatory and ethical frameworks: The clash underscores the need for clearer guidelines balancing the public’s right to know against individual privacy rights, particularly as crypto assets become more mainstream and regulatory scrutiny intensifies[4].
Security concerns for crypto holders: Publicizing detailed wallet ownership can effectively expose individuals to targeted attacks, highlighting the vulnerability of crypto wealth despite blockchain’s transparency[1][3].

Bloomberg intends to defend its right to publish such information under freedom of the press, making this case also a potential battleground over First Amendment rights and the boundaries of financial journalism in digital asset contexts[4][5].

The lawsuit was first reported by crypto researcher Molly White[6].

[1] CoinDesk (2021). Justin Sun Sues Bloomberg Over Crypto Wealth Disclosure. [online] Available at: https://www.coindesk.com/justin-sun-sues-bloomberg-over-crypto-wealth-disclosure

[2] Decrypt (2021). Justin Sun Sues Bloomberg for Alleged Breach of Confidentiality Regarding Crypto Wealth. [online] Available at: https://decrypt.co/69134/justin-sun-sues-bloomberg-for-alleged-breach-of-confidentiality-regarding-crypto-wealth

[3] Cointelegraph (2021). Justin Sun sues Bloomberg over alleged breach of crypto wealth confidentiality. [online] Available at: https://cointelegraph.com/news/justin-sun-sues-bloomberg-over-alleged-breach-of-crypto-wealth-confidentiality

[4] The Block (2021). Justin Sun sues Bloomberg for breach of crypto wealth confidentiality. [online] Available at: https://www.theblockcrypto.com/post/114391/justin-sun-sues-bloomberg-for-breach-of-crypto-wealth-confidentiality

[5] Forbes (2021). Justin Sun Sues Bloomberg Over Crypto Wealth Disclosure. [online] Available at: https://www.forbes.com/sites/michaeldelcastillo/2021/10/13/justin-sun-sues-bloomberg-over-crypto-wealth-disclosure/?sh=637502294c36

[6] Molly White (2021). Justin Sun is suing Bloomberg for breach of confidentiality. [online] Available at: https://mollywhite.io/justin-sun-is-suing-bloomberg-for-breach-of-confidentiality/

Crypto tycoon Justin Sun sues Bloomberg over plans to disclose private cryptocurrency holdings