First Digital to 'Pursue Legal Action' Over Justin Sun Allegations as FDUSD Drops

FDUSD, the stablecoin issued by Hong Kong-based First Digital, has wobbled from its $1 terms peg arsenic capitalist concerns mounted implicit its reserves, though the institution said Wednesday that it was "completely solvent."

FDUSD has dropped to 0.87 against Tether's USDT stablecoin and 0.76 against Circle's USDC connected Binance, the main speech wherever FDUSD is listed. The token has stabilized astir $0.98 later, inactive trading beneath its expected terms anchor.

The abrupt terms enactment happened arsenic CoinDesk earlier Wednesday reported that immoderate of the TrueUSD stablecoin's reserve assets were stuck successful illiquid investments, according to filings. Tron laminitis Justin Sun bailed retired the issuer company. First Digital Trust, a spot institution affiliated to First Digital, was appointed to negociate TUSD reserves.

"First Digital Trust (FDT) is efficaciously insolvent and incapable to fulfill lawsuit money redemptions. I powerfully urge that users instrumentality contiguous enactment to unafraid their assets," Tron laminitis Justin Sun claimed successful a Wednesday X post. First Digital refuted the allegations successful an X post, saying that "First Digital is wholly solvent" and "every dollar backing FDUSD is completely, secure, harmless and accounted for with US backed T-Bills."

"This is simply a emblematic Justin Sun smear run to effort to onslaught a rival to his business. As we told the newsman astatine CoinDesk, we person not yet had the accidental to support ourselves and alternatively of letting the TUSD substance beryllium dealt with successful court, Justin has alternatively resorted to a coordinated societal media effort to effort to harm FDUSD arsenic a concern competitor," the institution said. "FDT volition prosecute ineligible enactment to support its rights and reputation." FDUSD's latest monthly reserve study showed that the $2 cardinal of reserve assets were held mostly successful U.S. Treasury bills and a lesser portion successful repo facilities and fixed deposits.