First Digital to 'Pursue Legal Action' Over Justin Sun Allegations as FDUSD Drops

The stablecoin deviated from its price peg as Tron founder Justin Sun claimed that First Digital Trust is "effectively insolvent," a characterization the company pushed back on. FDUSD, the stablecoin issued by Hong Kong-based First Digital, has wobbled from its $1 price peg as investor concerns mounted over its reserves, though the company said Wednesday that it was "completely solvent." FDUSD has dropped to 0.87 against Tether's USDT stablecoin and 0.76 against Circle's USDC on Binance, the main exchange where FDUSD is listed. Notably, bitcoin (BTC) also nearly hit 100,000 against FDUSD. The token has stabilized around $0.98-$0.96 later, still trading below its supposed price anchor. The sudden price action happened as CoinDesk earlier Wednesday reported that some of the TrueUSD stablecoin's reserve assets were stuck in illiquid investments, according to filings. Tron founder Justin Sun bailed out the issuer company. First Digital Trust, a trust company affiliated to First Digital, was appointed to manage TUSD reserves. "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," Tron founder Justin Sun claimed in a Wednesday X post. First Digital refuted the allegations in an X post, saying that "First Digital is completely solvent" and "every dollar backing FDUSD is completely, secure, safe and accounted for with US backed T-Bills." "This is a typical Justin Sun smear campaign to try to attack a competitor to his business. As we told the reporter at CoinDesk, we have not yet had the opportunity to defend ourselves and instead of letting the TUSD matter be dealt with in court, Justin has instead resorted to a coordinated social media effort to try to damage FDUSD as a business competitor," the company said. "FDT will pursue legal action to protect its rights and reputation."FDUSD's latest monthly reserve report showed that the $2 billion of reserve assets were held mostly in U.S. Treasury bills and a lesser part in repo facilities and fixed deposits.Stablecoin analytics firm Bluechip told CoinDesk it gave FDUSD a C grade (on a scale from F as least safe to to A+ being safest) and expressed concerns over reserve assets being bankruptcy remote from the issuer company."FDUSD appears to be backed by reasonably sound reserves. But we concluded that in case of bankruptcy, the reserves could be used to pay off the parent company’s debt," Garett Jones, Bluechip's chief economist, said in a message. "It’s hard to predict what would really happen in a crisis, but safer stablecoins do exist." UPDATE (Apr. 2, 17:58): Added analyst comment from Bluechip. Updated FDUSD price action. https://www.coindesk.com/markets/2025/04/02/first-digital-to-pursue-legal-action-over-justin-sun-allegations-as-fdusd-drops #crypto #bitcoin #ethereum #cryptocurrency #news #blockchain #litecoin #cryptonews #cryptonewstoday #cryptoworld #cryptonewstoday ***NOT FINANCIAL, LEGAL, OR TAX ADVICE! JUST OPINION! I AM NOT AN EXPERT! I DO NOT GUARANTEE A PARTICULAR OUTCOME I HAVE NO INSIDE KNOWLEDGE! YOU NEED TO DO YOUR OWN RESEARCH AND MAKE YOUR OWN DECISIONS! THIS IS JUST ENTERTAINMENT! This information is what was found publicly on the internet. This information could’ve been doctored or misrepresented by the internet. All information is meant for public awareness and is public domain. This information is not intended to slander harm or defame any of the actors involved but to show what was said through their social media accounts. Please take this information and do your own research. bitcoin, blockchain, crypto, cryptocurrency, altcoin, investment, ethereum, bitcoin crash, xrp, cardano, ripple