US Dollar Tether (FDUSD) struggles to recover after a depeg incident, as First Digital, the company behind it, threatens to file lawsuits against Justin Sun following alleged actions causing the crisis.
In a dramatic turn of events, the FDUSD stablecoin, issued by First Digital Trust, has bounced back from a recent slump and is currently trading at around $0.977 to the USDT. This recovery comes amidst an ongoing legal dispute with Justin Sun, the founder of Tron, who has publicly accused First Digital Trust of insolvency, a claim that the company vehemently denies.
The heart of the conflict revolves around allegations of insolvency and FDUSD's inability to maintain its dollar peg. In late June 2025, Justin Sun claimed that First Digital Trust was insolvent, a statement that coincided with FDUSD detaching from its dollar peg[1]. However, specific legal details about the dispute between First Digital Trust and Sun regarding FDUSD remain scarce.
First Digital Trust has asserted that every dollar backing the FDUSD is secure, safe, and accounted for, with US-backed T-Bills[2]. The company also managed reserves for the TrueUSD stablecoin when it fell below the $1 peg in January last year[6]. Despite Sun's claims, First Digital Trust has denied his accusations, affirming its solvent status and vowing to pursue legal action against him[7].
Interestingly, Justin Sun is reported to have bailed out First Digital Trust at an unspecified point in time[3]. However, the latest FDUSD monthly reserve report does not mention any involvement of Sun[8]. The report also does not provide information about any illiquid investments, unlike an earlier report by CoinDesk, which claimed that some of the TrueUSD stablecoin's reserve assets were stuck in illiquid investments, citing filings[9].
Justin Sun has also urged users to secure their assets, claiming that First Digital Trust is unable to fulfill client fund redemptions[10]. However, it's worth noting that after the initial plunge, the FDUSD later recovered to trade around $0.98 to USDT on Binance[11].
The legal landscape of this dispute is still unfolding, with First Digital Trust yet to have the opportunity to defend itself in court regarding the TUSD matter[12]. The ongoing conflict between Justin Sun and First Digital Trust serves as a reminder of the complexities and uncertainties that can arise in the crypto industry.
Sources: [1] [CoinDesk Article] [2] [First Digital Trust Statement] [3] [Unverified Source] [4] [Bloomberg Article] [5] [CNN Article] [6] [First Digital Trust Statement] [7] [First Digital Trust Statement] [8] [Latest FDUSD Monthly Reserve Report] [9] [CoinDesk Article] [10] [Justin Sun Tweet] [11] [Binance Data] [12] [First Digital Trust Statement]
In the ongoing legal conflict, the allegations made by Justin Sun against First Digital Trust include claims of insolvency and FDUSD's inability to maintain its dollar peg. Despite Sun's accusations, First Digital Trust has continuously denied his claims and affirmed its financial stability, also stating that their reserves were used to support the TrueUSD stablecoin when it faced depeg.
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