Stablecoins Associated with First Digital Trust (FDT) Temporarily Depegs as Justin Sun Warns of Company’s Insolvency

The post Stablecoins Associated with First Digital Trust (FDT) Temporarily Depegs as Justin Sun Warns of Company’s Insolvency appeared first on Coinpedia Fintech News In a surprising turn of events, Justin Sun, a prominent figure within the Tron (TRX) ecosystem, has revealed that First Digital Trust (FDT), a tech-driven financial institution based in Hong Kong, is effectively insolvent and unable to cover its obligations. In an X post on April 2nd during the late Western financial markets, Sun noted that FDT has a significant loophole in the internal risk management of its financial systems and the trust licensing process in Hong Kong. “I urge regulators and law enforcement to take swift action to address these issues and prevent further major losses. Hong Kong’s reputation as a global financial center is at stake, and similar financial fraud incidents must never happen again,” Sun noted . Protect users and protect HK First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets. There are significant loopholes in both the trust licensing process in… — H.E. Justin Sun (@justinsuntron) April 2, 2025 Meanwhile, Sun will issue a press conference regarding the unfolding crisis on April 3. Market Impact Following the announcement, FDUSD, fiat-backed stablecoins that are directly supported by Binance exchange dropped over 2 percent to trade about 97 cents at the time of this writing. The mid-cap stablecoin, with a fully diluted valuation of about $2.54 billion and a daily average trading volume of around $6.9 billion, depegged for the first time to as low as 91 cents, before Yi He clarified the air. According to He, co-founder of Binance, Sun is suing TrueUSD (TUSDsuing TrueUSD (TUSD), which has an FDV of about $495 million and a 24-hour trading volume of about $56 million. However, He noted that Binance is following up on the matter to ensure the safety of the customers. 孙哥和Tusd打官司，不是FDusd. — Yi He (@heyibinance) April 2, 2025 “No one knew that Brother Sun would tweet in the middle of the night, but Binance launched the stablecoin of launchpool. We will check the funds regularly and we have our own risk control. Binance post-listing is also looking for fdusd, trying to understand the situation, and calling people in the middle of the night. We are just making logical judgments,” He noted. 1，没人知道孙哥会半夜发推，但币安推了launchpool的稳定币，我们会定期核查资金，我们有自己的风险控制。 2、币安postlisting也在找fdusd，试图了解情况，都在半夜打电话找人，我们只是基于逻辑判断。 3，没有大户群，也没内幕群，很多人在问币安launchpool的FDUSD会不会有事， @sisibinance … — Yi He (@heyibinance) April 2, 2025