
First Digital Takes Legal Measures Against Justin Sun's Claims as FDUSD Value Declines
First Digital, a stablecoin issuer, is set to initiate legal action following allegations from Tron founder Justin Sun regarding its financial stability as its stablecoin FDUSD strays from its price peg.
What to know:
- FDUSD, a stablecoin from Hong Kong’s First Digital, has dropped below its $1 peg due to investor worries regarding its reserves.
- FDUSD’s value fell to 0.87 against Tether’s USDT and 0.76 against Circle’s USDC, later stabilizing around $0.98-$0.96.
- Concerns emerged that FDUSD might mirror liquidity issues faced by the TUSD stablecoin, managed by First Digital Trust. Justin Sun claimed that First Digital Trust is “insolvent.”
- In a post on X, First Digital asserted they were “completely solvent” and planned to take legal action to safeguard their reputation.
FDUSD has recently fluctuated, dropping to 0.87 versus Tether’s USDT and 0.76 compared to Circle’s USDC on Binance. This decline occurred as reports surfaced that TrueUSD’s reserves were tied up in illiquid assets.
In a related statement posted on X, Justin Sun remarked: “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.”
Translation: Justin Sun characterized First Digital Trust as being unable to meet redemptions, urging users to act quickly to safeguard their assets.
First Digital countered these claims, stating: “This is a typical Justin Sun smear campaign to try to attack a competitor to his business… FDT will pursue legal action to protect its rights and reputation.”
Translation: First Digital condemned Sun’s statements as an attack on their business and announced plans for legal action.
Latest reserve audits indicate that FDUSD’s assets are predominantly in U.S. Treasury bills, raising questions about their availability in bankruptcy situations. UPDATE (Apr. 2, 17:58): Analyst comments and updated pricing for FDUSD were added.