Final night time (HK Time), Justin Solar, co-founder of TRON Blockchain, accused First Digital Belief of insolvency, triggering a extreme depeg of the FTUSD stablecoin. The transfer is believed to be retaliation for previous tensions between First Digital and Techteryx—an organization rumored to be owned by Solar.
Justin Solar’s Accusation & FDUSD Depeg
On April 2, 2025, Justin Solar took to X to concern a stark warning about First Digital Belief, stating, “First Digital Belief (FDT) is successfully bancrupt and unable to meet consumer fund redemptions. I strongly advocate that customers take instant motion to safe their property.”
Defend customers and defend HK
First Digital Belief (FDT) is successfully bancrupt and unable to meet consumer fund redemptions. I strongly advocate that customers take instant motion to safe their property. There are important loopholes in each the belief licensing course of in…
— H.E. Justin Solar 🍌 (@justinsuntron) April 2, 2025
Solar additionally criticized Hong Kong’s monetary system, urging regulators to intervene to stop additional losses. The submit, which gained important traction, triggered an instantaneous market response. FDUSD, a stablecoin designed to keep up a 1:1 peg with the US greenback, plummeted to as little as $0.87—a 13% depeg—inside hours of Solar’s assertion.
The depeg had a profound impression on Binance, the world’s largest crypto trade. On-chain knowledge estimates that 94% of FDUSD’s provide—roughly $2.2 billion—is traded on Binance, with $1.5 billion belonging to customers and $700 million held by the trade itself. If Solar’s allegations of FDT’s insolvency have been true, Binance might face important liquidity points, probably disrupting its operations and shaking confidence within the platform. The incident additionally brought on a $130 million drop in FDUSD’s market cap, underscoring the dimensions of the disaster.
Response from First Digital Belief and Binance
First Digital Belief swiftly refuted Solar’s claims, labeling them as “false” and a part of a “defamatory marketing campaign.” The corporate clarified that the dispute concerned TrueUSD (TUSD), not FDUSD, and emphasised that FDUSD stays totally solvent, backed 1:1 by US Treasury Payments. FDT introduced plans for an AMA on X Areas on April 3 to deal with the problem publicly and threatened authorized motion in opposition to Solar to guard its popularity.
The current allegations by Justin Solar in opposition to First Digital Belief are fully false.
This dispute is with TUSD and never with $FDUSD. First Digital is totally solvent.
Each greenback backing $FDUSD is totally, safe, protected and accounted for with US backed T-Payments. The…
— First Digital (@FirstDigitalHQ) April 2, 2025
Binance additionally issued an announcement, reaffirming that FDUSD’s reserves are totally backed and clear, with attestations exhibiting adequate liquidity to cowl redemptions. The trade dedicated to ongoing monitoring of FDUSD’s stability, with a evaluation deliberate after the subsequent attestation report in two weeks.
Binance has launched an replace on FDUSD attestation report, which confirms full 1:1 backing.
We stay dedicated to making sure our customers are knowledgeable and can proceed to supply well timed updates.
Extra data 👉 https://t.co/4JjFD0oT5F pic.twitter.com/sE1YHauCfs
— Binance (@binance) April 3, 2025
Following these assurances, FDUSD started to recuperate, climbing again to a ratio of 1:0.99 in opposition to USDT by the morning of April 3. Whereas the partial restoration alleviated some considerations, lingering doubts about FDUSD’s long-term stability stay, notably given its heavy reliance on Binance’s ecosystem.
Supply: Coingecko
Underlying Reason behind the Incident
The foundation of this incident lies in previous tensions between First Digital Belief and Techteryx, the issuer of TrueUSD (TUSD), reportedly linked to Justin Solar. Court docket filings not too long ago revealed that Techteryx sued First Digital Belief’s CEO, Vincent Chok, after FDT allegedly redirected $456 million of TUSD reserves into illiquid investments with out authorization.
A Dubai-based entity, Aria Commodities DMCC, diverted these funds—initially meant for the Cayman Islands-based Aria Commodity Finance Fund—and invested them in high-risk tasks like mining and renewable power. Techteryx confronted a $456 million shortfall from 2023 to early 2024, prompting Solar to inject emergency liquidity to stabilize TUSD.
TUSD was as soon as a stablecoin on Binance, a substitute for BUSD, which ceased operation in 2023. Subsequently, TUSD’s market cap surged from below $1 billion to a peak of $3.8 billion in October 2023, with 90% of its whole provide on Binance. Nevertheless, then this trade progressively phased it out in favor of FDUSD.
FDUSD is a stablecoin with a comparatively excessive buying and selling market cap on Binance, rating simply behind buying and selling pairs involving USDT. Notably, traders on Binance also can stake FDUSD to take part in current Binance Launchpool applications similar to Gunz (GUN), Nillion (NIL), Redstone (RED), Bio Protocol (BIO), and extra.
