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On April 2, the First Digital USD (FDUSD) stablecoin experienced a depegging event following insolvency claims made by Justin Sun, founder of the Tron network. Sun alleged that First Digital, the issuer of FDUSD, was insolvent.
In response, First Digital firmly denied Sun’s allegations, asserting their complete solvency and emphasizing that FDUSD remains fully backed and redeemable at a 1:1 ratio with the US dollar. The company stated that every dollar backing FDUSD is securely accounted for with US-backed Treasury Bills, providing specific ISIN numbers in their attestation report to substantiate this claim.
First Digital also indicated plans to pursue legal action against Sun, characterizing his statements as part of a “smear campaign” intended to undermine competition.
This incident highlights the importance of transparency and real-time verification in the stablecoin market. While First Digital provides monthly audit reports to attest to their asset reserves, industry experts suggest that adopting proof-of-reserve audits—on-chain cryptographic verifications—could offer more immediate and reliable assurance of a stablecoin’s backing assets.
