Key Points:
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Justin Sun accused First Digital Trust (FDT) of being unable to redeem $501 million in TUSD reserves.
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FDT, issuer of FDUSD, cited AML/KYC issues as the reason for redemption delays.
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FDUSD dropped 5% from its dollar peg, wiping out $130 million in market capitalization.
FDUSD, the stablecoin issued by First Digital Trust (FDT), sharply depegged from the US dollar on Tuesday following public accusations by Justin Sun.
The token fell by 5%, leading to a $130 million decline in its market capitalization.
Sun, founder of Tron and associated with the TrueUSD (TUSD) ecosystem, alleged that FDT, which manages TUSD reserves, refused to redeem $501 million in customer funds. He further claimed the company was “bankrupt” and unable to fulfill redemption obligations.
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…
— H.E. Justin Sun 🍌 (@justinsuntron) April 2, 2025
FDT responded by stating that its actions were based on anti-money laundering (AML) and know-your-customer (KYC) compliance concerns, specifically citing questions around the ultimate beneficial ownership of the funds in question.
The controversy triggered volatility across trading pairs involving FDUSD. On Binance, the BTC/FDUSD pair traded at a premium of nearly $6,000 compared to other markets.
FDUSD is one of the primary stablecoins supported by Binance, and any ongoing issues related to solvency or redemption could have broader implications for exchange trading pairs and liquidity operations.
