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4mo ago

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.