FDUSD Depegged After Justin Sun FDT Allegations FDT Responds
Justin Sun has publicly accused First Digital Trust (FDT) issuer of FDUSD of refusing to redeem the $501 million reserve backing TUSD (TrueUSD), a major stablecoin.
Key Points:
Sun’s Allegations:
According to Justin Sun FDT Allegations FDT Responds Sun, FDT, which oversees TUSD’s reserves, is essentially bankrupt and cannot return customer money.
-He noted that Hong Kong’s financial supervision is inadequate and that FDT’s financial system lacks adequate risk management.
Sun warned that Hong Kong’s standing as a major international financial center is at jeopardy and urged authorities to take swift action.
FDUSD momentarily fell 5% from its peg as a result of Sun’s charges, wiping out over $130 million in market value.
TUSD’s Reserve Issues:
Court documents showed that TUSD’s reserves were diverted from their intended destination to an unlawful Dubai-based business, as previously reported by CoinDesk.
The stablecoin’s reserve experienced a liquidity issue as a result of FDT’s alleged facilitation of the misuse of money in its capacity as fiduciary manager.
According to reports, Sun had to provide emergency liquidity to keep the TUSD peg from collapsing.
FDT’s Defense:
FDT responds by disputing insolvency allegations, claiming that the problem only affects TUSD and not its own FDUSD stablecoin.
According to FDT, FDUSD is still completely solvent, with reserves explicitly stated in attestation reports and backed 1:1 by US Treasury Bills.
In addition to answering the accusations in an AMA on X Spaces set for April 3 at 4 PM Hong Kong time, FDT intends to take legal action to safeguard its reputation.
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