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First Digital Trust is currently engaged in a public dispute with Tron founder Justin Sun after he accused the firm of being insolvent.

Tron founder Justin Sun is in a public spat with First Digital, the firm that operates the FDUSD stablecoin, after he accused the company of insolvency and claimed that over $450 million in client funds had been transferred to a private entity in Dubai without authorization.

Tron founder Justin Sun is in a public spat with First Digital, the firm that operates the FDUSD stablecoin, after he accused the company of insolvency and claimed that over $450 million in client funds had been transferred to a private entity in Dubai without authorization.

The drama began on April 2 with reports of the FDUSD token losing its dollar peg, dropping to as low as $0.87. However, the token later recovered, and the company categorically denied all accusations, maintaining the financial soundness of its operations.

The drama began on April 2 with reports of the FDUSD token losing its dollar peg, dropping to as low as $0.87. However, the token later recovered, and the company categorically denied all accusations, maintaining the financial soundness of its operations.

First Digital stated that 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 Huobi Chain in accordance with 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.

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