First Digital USD (FDUSD), a stablecoin associated with Binance, has lost its dollar peg after allegations from Tron founder Justin Sun that its issuer, First Digital Trust, is insolvent. Sun asserted that the firm is unable to fulfill client fund redemptions, prompting calls for regulatory intervention. In response, First Digital Trust has refuted these claims, stating that FDUSD is backed one-to-one with U.S. Treasuries and characterizing Sun’s comments as a smear campaign. The stablecoin’s value dropped to approximately $0.95, reflecting trading volatility amid the accusations. Sun has urged business partners of First Digital Trust to sever ties, given the alleged insolvency. Furthermore, it has been reported that Techteryx, a firm aided by Sun, alleged that First Digital Trust misappropriated funds intended for the stablecoin TrueUSD. This incident highlights the intricate relationship between significant crypto figures and the stability of associated financial instruments, illustrating potential risks in the digital asset space.

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