The tokenized dollar FDUSD lost its peg to the U.S. dollar following public allegations of insolvency by Tron founder Justin Sun. The issuing company, First Digital Trust, denied the claims, asserting full asset backing. The dispute has escalated into a public confrontation and may move to legal proceedings. Meanwhile, FDUSD is attempting to restore its price stability.
Sun’s accusations and price drop
On April 2, the First Digital USD (FDUSD) stablecoin fell from its $1 peg to $0.8811, according to Coinmarketcap. The drop came shortly after Justin Sun alleged via social media that First Digital, the issuer of FDUSD, was insolvent.
Sun urged investors and users to cut all ties with First Digital Trust, claiming the company’s founder, Vincent Chok, should be held responsible and that the matter should be resolved in court.
First Digital’s response
First Digital responded quickly, calling Sun’s statements defamatory and a competitive attack. In an official statement on X, the company claimed that every FDUSD in circulation is backed 1:1 with assets and redeemable accordingly. The reserves reportedly consist of U.S. government bonds and time deposits.
“This is a classic discrediting campaign by Justin Sun. We are considering legal action,” the company stated.
Audit from Binance
Binance, the main exchange where FDUSD is traded, published reserve data for the token as of the end of February. According to the audit, First Digital’s total assets amount to $2.05 billion — more than the total FDUSD in circulation, confirming 1:1 backing.
The report shows the funds are held in U.S. treasuries and fixed-term bank deposits.
Transparency technology under scrutiny
The dispute reignited discussions about transparency in the stablecoin sector. While FDUSD undergoes regular audits, industry experts increasingly advocate for proof-of-reserve systems based on zero-knowledge technologies and Merkle Trees.
According to Tal Zackon, founder of Tres Finance, traditional audits merely offer a “snapshot” of financial data, which can be misinterpreted or manipulated.
As stablecoins become integral to global market infrastructure — from exchanges to clearing platforms — the demand for real-time, verifiable financial information is rising. Unlike monthly audits, future standards may require continuous updates on reserves, potentially every few minutes.
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