FDUSD briefly dropped to $0.76 amid panic over reserve concerns tied to First Digital Trust.
Justin Sun claimed First Digital is insolvent, urging users to withdraw funds immediately.
First Digital denied the claims, calling it a smear campaign and stating reserves are fully backed by U.S. T-bills.
The stablecoin FDUSD, issued by Hong Kong-based First Digital, slipped from its $1 peg on Wednesday, sparking fresh concerns over its backing—though the company insists everything’s still solid.
At one point, FDUSD dropped as low as $0.87 vs Tether (USDT) and an even shakier $0.76 against USDC on Binance, its primary exchange listing. For a moment, Bitcoin nearly hit 100,000 FDUSD—yeah, you read that right.
Later in the day, things cooled off a bit, with FDUSD hovering between $0.96 and $0.98. Still under $1. Still wobbly.
What Triggered the Slide?
The drop came right after CoinDesk published a story detailing how TrueUSD’s reserves—linked to stablecoin issuer Techteryx—got trapped in illiquid investments. And yes, Justin Sun was involved (again). He reportedly stepped in to bail out the issuer to prevent a bigger meltdown.
Now, here’s the kicker: First Digital Trust (FDT)—a company related to First Digital—was supposed to be managing those TUSD reserves. And that’s where things get messy.
“First Digital Trust is effectively insolvent and can’t fulfill redemptions,” Sun wrote on X, urging users to “take immediate action” to protect their funds.
First Digital: “This Is a Smear Campaign”
First Digital didn’t wait long to clap back. In a sharp rebuttal on X, they dismissed the insolvency claims as flat-out false.
“Every dollar backing FDUSD is fully accounted for in U.S. T-bills,” they said, calling Sun’s accusations nothing more than a “coordinated attack” on a competitor.
They also hinted at legal action:
“FDT will defend itself and its reputation in court.”
Protect users and protect HK
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…
According to their most recent reserve report, FDUSD is backed by about $2 billion in total, mostly in U.S. Treasuries, along with smaller amounts in repo agreements and fixed deposits. On paper? That sounds secure. But markets aren’t always swayed by paperwork.
The Bigger Picture
Sun’s post set off a wave of uncertainty, particularly as more details emerged around Techteryx’s lawsuit and its questionable investment decisions. The spillover effect rattled FDUSD just enough to make traders sweat—especially given how much Binance holds in FDUSD.
For now, the peg is still bent, not broken—but the drama around TUSD, FDT, and Sun’s involvement isn’t likely to fade anytime soon.
