First Digital Trust (FDT) Under Scrutiny Amid FDUSD Depeg Claims
News 2025-04-07

Overview:

Recently, Justin Sun, the founder of TRON, made a bombshell claim about First Digital Trust (FDT), alleging that the company is insolvent and unable to fulfill its obligations to redeem customer funds. Sun, known for his controversial presence in the crypto industry, warned users to protect their assets and criticized the Hong Kong financial system for serious regulatory gaps. He called for swift intervention from regulators and law enforcement to prevent further damage.

The Allegations:

  • Justin Sun's Statement:
  • Sun stated that FDT is insolvent, implying that it can no longer meet its financial obligations. He also warned users involved with FDT to sever ties with the company as soon as possible to protect their funds.
  • He pointed out that First Digital Trust has failed to prove its financial stability and warned of a possible fraud in the Hong Kong financial system.
  • Sun specifically highlighted FDUSD, FDT's flagship stablecoin, which has reportedly de-pegged significantly, falling to $0.88 from its $1 peg.
  • FDUSD Depeg:
  • FDUSD, the stablecoin issued by First Digital Trust, has seen a massive devaluation, losing its 1:1 peg with the US dollar and now trading at $0.88.
  • Sun’s statement came at a time when Binance, a major exchange, was heavily trading FDUSD. As of the reporting time, Binance had not responded to the situation.

First Digital Trust's Defense:

  • Company's Response:
  • In a public statement, First Digital Trust denied Sun's claims, calling them "completely false". The company stated that FDUSD is not at risk and is fully backed by high-quality assets.
  • FDT emphasized that FDUSD is backed by U.S. Treasury bonds and assured that all reserves are safe, reliable, and secure.
  • According to FDT, the allegations were part of a smear campaign orchestrated by Justin Sun, who is allegedly trying to damage FDUSD's reputation to gain a competitive edge against its stablecoin TUSD.
  • The company claimed that the dispute is not related to FDUSD but rather to issues surrounding TUSD.
  • Legal Action: FDT has announced plans to pursue legal action to protect its reputation and rights.
  • Financial Transparency:
  • FDT provided a verification report listing the exact ISIN codes of the assets backing FDUSD, confirming the stablecoin’s reserve status.
  • The company also announced an AMA (Ask Me Anything) session to address public concerns and clarify the situation further.

About First Digital:

  • Company Background:
  • First Digital is a Hong Kong-based financial services company founded in 2019. It provides digital asset solutions aimed at bridging traditional trust and custody services with the digital asset ecosystem.
  • The company's core offerings include:
  • Stablecoin Solutions: Issuing and managing FDUSD, a fully-backed stablecoin.
  • Payments and Settlements: Facilitating low-cost global payments and salary disbursements.
  • Multi-Asset Custody: Offering secure custody for over 2,500 tokens and NFTs, supporting 15 major blockchains.
  • Structured Trust and Consulting: Providing strategic financial and regulatory consulting services.
  • FDT's clients include regulated financial institutions, fintech innovators, blockchain startups, exchanges, and family offices.
  • Regulatory Compliance:
  • The company claims full compliance with Hong Kong's Anti-Money Laundering (AML) and Terrorism Financing regulations.
  • It also holds the Type 8 Trust License under Hong Kong's Trust Ordinance and has SOC1 Type 2, SOC2 Type 2, and ISO 27001 certifications.
  • Additionally, FDT is reportedly in compliance with FATCA and AEoI regulations.

FDUSD's Market Position:

  • FDUSD is currently the fifth-largest stablecoin by market capitalization, with a circulating supply of approximately $2.57 billion. This puts it behind more established stablecoins like Tether (USDT), USD Coin (USDC), and Binance USD (BUSD).

Looking Ahead:

  • The situation remains fluid, with First Digital Trust insisting on its solvency and FDUSD's stability, while Justin Sun continues to raise concerns about the company’s financial health.
  • The de-pegging of FDUSD has raised alarm bells, and the ongoing legal and regulatory challenges may significantly affect FDT's reputation and operations.

As always, the volatile nature of the crypto and stablecoin markets requires users to stay informed and cautious. What do you think? Should the market take Sun’s allegations seriously, or is this just another move in the competitive stablecoin space?