TL;DR
- Justin Sun accused First Digital of insolvency and of transferring $450 million without authorization, which caused FDUSD to lose its peg to the dollar.
- First Digital denied the accusations, processed $26 million in withdrawals, and accused Justin and Techteryx of trying to deflect attention from their own responsibilities.
- Sun announced a $50 million bounty to recover TUSD funds, while experts warn that stablecoin depegs can have very serious consequences.
First Digital Trust is currently engaged in a public dispute with Tron founder Justin Sun after he accused the firm of being insolvent.
The conflict erupted after Sun claimed that First Digital had transferred over $450 million in client funds to a private entity in Dubai without authorization, which led to a brief drop in the value of the FDUSD stablecoin. The token lost its dollar peg on April 2, falling to as low as $0.87 before recovering.
The company categorically denied all accusations and stated that it maintains the financial soundness of its operations. According to First Digital, the funds backing FDUSD are fully available, and the token remains redeemable at all times. To support its claims, the firm processed approximately $26 million in withdrawal requests, which was reflected in the equivalent burning of tokens on the blockchain. This process ensures the 1:1 peg with the U.S. dollar.
Sun Offers a $50 Million Bounty for the Allegedly Misappropriated Funds
In response to the allegations, First Digital accused Justin Sun and Techteryx — issuer of the TrueUSD stablecoin — of trying to deflect attention from their own obligations. The company stated that Justin’s claims are not only unfounded but also represent a deliberate attempt to harm its market reputation.
The conflict has continued to escalate. Sun announced a $50 million bounty to recover allegedly misappropriated TUSD funds. He also promised to launch an official portal to ensure transparency in the process and warned that he will take legal action against those he deems responsible.
Meanwhile, industry experts warned that stablecoin depegs pose a major risk to the crypto ecosystem, greater than a sharp Bitcoin drop. According to Bitget CEO Gracy Chen, these incidents could trigger effects similar to the collapse of TerraUSD in 2022 if audit measures, collateral quality, and regulatory oversight are not strengthened..
