On April 2, 2025, the First Digital USD (FDUSD) stablecoin lost its peg to the US dollar following a statement by TRON founder Justin Sun regarding the insolvency of First Digital Trust (FDT). At the time of his statement, the asset’s value dropped to $0.91, although it later rose to $0.99.
This is reported by Finway
Justin Sun’s Statement on Insolvency
Justin Sun claims that the custodian of FDUSD, First Digital Trust, is unable to fulfill client redemption requests. According to him, there are significant gaps in the licensing process for trusts in Hong Kong, as well as in the internal risk management of the financial system. Sun urged regulators and law enforcement to take immediate action to address these issues to avoid further serious losses.
“First Digital Trust is effectively already insolvent. If you have any ties with them, sever them immediately to protect your assets,” Sun stated.
Response from First Digital Trust
In response to Justin Sun’s statements, the FDT team labeled them as false, asserting that the company remains fully solvent. They emphasized that “every dollar backing FDUSD is completely safe and held in US government bonds.” The company highlighted that this dispute pertains to TUSD, not FDUSD.
FDT also stated that this is yet another defamatory move by Justin Sun aimed at attacking a competitor. The company announced an AMA session to clarify the situation. Meanwhile, Binance confirmed that as of March 1, 2025, FDUSD reserves exceeded $2 billion, which were placed in US government bonds and overnight deposits.
It is worth noting that on March 5, 2024, FDUSD had already lost its peg to the US dollar when its price fell below $0.92.