The Binance-backed stablecoin $FDUSD is facing a major crisis after Justin Sun, TRON’s founder, accused First Digital Trust (FDT), its issuer, of insolvency and fund misappropriation. Let’s check out what happened between $FDUSD and Justin Sun.
The controversy erupted on April 2, 2025, when Sun posted on X, claiming FDT couldn’t repay customers and urging Hong Kong regulators to step in.
The fallout was immediate: $FDUSD lost its peg, dropping to a low of $0.87 and now hovering around $0.96-$0.98, sparking widespread concern among investors.
$FDUSD and Justin Sun Drama: How Crisis Impacts the Market
This turmoil has sent shockwaves through the crypto space, particularly on Binance, where $FDUSD plays a pivotal role with 94% of its supply traded. Key highlights include:
- Severe de-pegging: $FDUSD fell 11-15% within 24 hours, disrupting pairs like BTC/FDUSD, where Bitcoin spiked to nearly $99,000, a 13% deviation from BTC/USDT.
- FDT’s defense: The firm dismissed Sun’s claims as “smear tactics,” asserting $FDUSD is fully backed 1:1 by U.S. Treasuries with $2.5 billion in reserves, and threatened legal action.
- Complicating factors: A lawsuit between FDT and Techteryx (TUSD’s issuer) over $456 million in misdirected reserves has fueled further skepticism.
The X community is in a panic, with many switching to $USDT or $USDC to dodge risks. FDT insists the issue is tied to $TUSD, not $FDUSD, but confidence remains shaky.
If FDT fails to provide transparency and restore the peg, $FDUSD risks losing credibility, potentially dragging Binance and the broader stablecoin market down with it. Whether it can recover remains uncertain.
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