The team behind First Digital USD FDUSD/USD addressed concerns regarding financial stability Wednesday after the dollar-backed stablecoin briefly depegged
The team behind First Digital USD (FDUSD) addressed concerns regarding financial stability Wednesday following allegations of insolvency by cryptocurrency entrepreneur Justin Sun, which led to the dollar-backed stablecoin briefly depegging.
What Happened: First Digital confirmed that it has processed the initial redemptions following the FUD. It also assured that FDUSD is fully backed 1:1 and that their redemption channels are functioning smoothly.
The first few redemptions after the recent FUD have been processed—please refer to the on-chain burn transactions. FDUSD remains fully backed 1:1, and our redemption channels are operating smoothly. We will continue to process all redemption requests promptly.
The controversy erupted when Tron (TRX) founder Justin Sun, known for his outspokenness in the crypto sphere, raised concerns about First Digital’s solvency and its ability to honor client redemptions.
"I strongly recommend that users take immediate action to secure their assets. There are significant loopholes in both the trust licensing process in Hong Kong and the internal risk management of its financial system," Sun stated in a post on X, formerly Twitter.
First Digital has vehemently rejected the accusation, calling it a "typical Justin Sun smear campaign" against business competitors and adding that it would pursue legal action to protect its reputation.
Protect users and protect HKFirst Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to
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