Last night (HK Time), Justin Sun, co-founder of TRON Blockchain, accused First Digital Trust of insolvency, triggering a severe depeg of the FTUSD stablecoin. The move is believed to be retaliation for past tensions between First Digital and Techteryx\u2014a company rumored to be owned by Sun.<\/span><\/p>\n On April 2, 2025, Justin Sun took to X to issue a stark warning about First Digital Trust, stating, \u201cFirst Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets.\u201d\u00a0<\/span><\/p>\n Protect users and protect HK<\/p>\n First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets. There are significant loopholes in both the trust licensing process in\u2026<\/p>\n \u2014 H.E. Justin Sun \ud83c\udf4c (@justinsuntron) April 2, 2025<\/a><\/p>\n<\/blockquote>\n Sun also criticized Hong Kong\u2019s financial system, urging regulators to intervene to prevent further losses. The post, which gained significant traction, triggered an immediate market reaction. FDUSD, a stablecoin designed to maintain a 1:1 peg with the US dollar, plummeted to as low as $0.87\u2014a 13% depeg\u2014within hours of Sun\u2019s statement.<\/span><\/p>\n The depeg had a profound impact on Binance, the world\u2019s largest crypto exchange. On-chain data estimates that 94% of FDUSD\u2019s supply\u2014approximately $2.2 billion\u2014is traded on Binance, with $1.5 billion belonging to users and $700 million held by the exchange itself. If Sun\u2019s allegations of FDT\u2019s insolvency were true, Binance could face significant liquidity issues, potentially disrupting its operations and shaking confidence in the platform. The incident also caused a $130 million drop in FDUSD\u2019s market cap, underscoring the scale of the crisis.<\/span><\/p>\n First Digital Trust swiftly refuted Sun\u2019s claims, labeling them as \u201cfalse\u201d and part of a \u201cdefamatory campaign.\u201d The company clarified that the dispute involved TrueUSD (TUSD), not FDUSD, and emphasized that FDUSD remains fully solvent, backed 1:1 by US Treasury Bills. FDT announced plans for an AMA on X Spaces on April 3 to address the issue publicly and threatened legal action against Sun to protect its reputation.\u00a0<\/span><\/p>\n The recent allegations by Justin Sun against First Digital Trust are completely false.<\/p>\n This dispute is with TUSD and not with $FDUSD<\/a>. First Digital is completely solvent.<\/p>\n Every dollar backing $FDUSD<\/a> is completely, secure, safe and accounted for with US backed T-Bills. The\u2026<\/p>\n \u2014 First Digital (@FirstDigitalHQ) April 2, 2025<\/a><\/p>\n<\/blockquote>\n Binance also issued a statement, reaffirming that FDUSD\u2019s reserves are fully backed and transparent, with attestations showing sufficient liquidity to cover redemptions. The exchange committed to ongoing monitoring of FDUSD\u2019s stability, with a review planned after the next attestation report in two weeks.<\/span><\/p>\n Binance has released an update on FDUSD attestation report, which confirms full 1:1 backing.<\/p>\n We remain committed to ensuring our users are informed and will continue to provide timely updates.<\/p>\n More information \ud83d\udc49 https:\/\/t.co\/4JjFD0oT5F<\/a> pic.twitter.com\/sE1YHauCfs<\/a><\/p>\nJustin Sun\u2019s Accusation & FDUSD Depeg<\/b><\/h2>\n
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Response from First Digital Trust and Binance<\/b><\/h2>\n
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