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FDUSD Stablecoin Regains Stability After Insolvency Allegations by Justin Sun

First Digital Trust denies claims of insolvency, assures full reserve backing, and announces legal action as FDUSD stabilizes near $0.995.

Justin Sun of TRON and Zak Folkman of World Liberty Financial speaks at Consensus Hong Kong 2025 by CoinDesk (CoinDesk/Personae Digital)
Justin Sun speaks at a press conference in Hong Kong (Tron)
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Overview

  • Justin Sun accused First Digital Trust of insolvency and mismanagement, alleging that the FDUSD stablecoin is not fully backed.
  • FDUSD briefly depegged from its $1 value, dropping as low as $0.87, before recovering to $0.995 as of April 3, 2025.
  • First Digital Trust strongly denied the allegations, asserting that FDUSD is fully backed 1:1 with U.S. Treasury bills and other secure assets.
  • The company confirmed that redemption channels are functioning smoothly and announced plans to pursue legal action against Sun for defamation.
  • The controversy has reignited concerns over stablecoin stability, market risks, and regulatory oversight, particularly given FDUSD's heavy use on Binance.