First Digital Refutes Justin Sun's Claims, Asserts FDUSD Backing

First Digital (FDT), the issuer of the FDUSD stablecoin, has come out strongly against Tron founder Justin Sun's warnings on their stablecoin's safety.

First Digital Trust, the issuer of the FDUSD stablecoin, has come out strongly against Tron founder Justin Sun’s warnings on their stablecoin’s safety.

In an X post, First Digital called out Sun’s “false statements” and asserted the FDUSD stablecoin remains fully backed by US Treasury bonds.

First Digital also assured users that they can withdraw their funds at any time.

First Digital clarified that the ongoing compliance dispute with Hong Kong regulators, highlighted by Sun, only involves TUSD, a stablecoin issued by Techteryx, not FDUSD or FDT.

First Digital asserted their stablecoin is financially sound with full solvency. FDT also added that the backed funds are safe and traceable, even listing the ISIN numbers for reserves in their reserve report.

Related: FDUSD Hits $1B Market Cap as Binance Ceases Support for BUSDStablecoin issuer expressed displeasure with Sun, who they claim is engaging in a “smear campaign” against business competitors.

First Digital claimed Sun has avoided pursuing legal means to resolve a three-year issue.

FDT accused the Tron founder of using social media to damage competitors’ reputations, discourage investors, and negatively influence public opinion about FDUSD. First Digital stated its intent to take legal action to safeguard its rights and reputation.

Context: Sun’s earlier allegations on FDUSD volatility

Sun had previously accused First Digital of insolvency, claiming the stablecoin issuer could not fulfill client fund redemptions.

In a Wednesday X post, Sun alleged significant loopholes in FDT’s Hong Kong trust licensing and other internal risk management issues.

Related: FDT Insolvency Buzz, FDUSD Depeg Stoke Fears: Hong Kong Oversight Questioned

Sun’s allegations surfaced as FDUSD faced scrutiny for its unusual volatility. The stablecoin dropped to $0.9700 on Binance before recovering towards $0.9900, with high sell-off volume (287 million tokens) over a 4-hour window in an uncertain market.

First Digital announced plans to hold a Q&A session on X today (Thursday) to address the situation and clarify doubts for community members.