Sun Yuchen’s Account Claims First Digital Trust is Insolvent, FDUSD Significantly Decouples to 0.88

04/02/2025

Founder of Tron, Justin Sun, stated:

“Protecting users means protecting Hong Kong. First Digital Trust (FDT) is essentially insolvent and unable to fulfill its obligation to redeem customer funds. I strongly urge users to take immediate action to safeguard their assets. There are significant loopholes in Hong Kong’s trust license approval process and internal risk control within the financial system. I call on regulatory and law enforcement agencies to intervene swiftly, identify the issues, and prevent further significant losses. Hong Kong’s reputation as a global financial center is facing severe tests, and similar financial fraud incidents must not happen again.”

Justin Sun reiterated:

“In fact, First Digital Trust (FDT) is already insolvent. This is an unemotional statement of fact. If you have any connection with them, please sever it as soon as possible to protect your assets. As for what consequences its founder, Vincent Chok, will face for his fraudulent actions, that will be determined by the judicial system and regulatory authorities.”

FDUSD has fallen significantly, with the price difference from USDT reaching 1:0.88. As of the time of writing, Binance, a major exchange utilizing FDUSD, has not yet responded:

Hong Kong First Digital responds to insolvency allegations

“Justin Sun’s recent allegations against First Digital Trust are completely false. This dispute is related to issues with TUSD and has nothing to do with $FDUSD. First Digital is completely solvent. Every dollar supporting $FDUSD is entirely safe, reliable, and guaranteed, backed by U.S. Treasury securities. The exact ISIN numbers of all reserves for FDUSD have been listed in our proof report, clearly stated.

This is a typical smear campaign by Justin Sun aimed at attacking his business competitors. As we told CoinDesk reporters, we have not had the opportunity to defend ourselves; Justin Sun has not allowed the TUSD incident to be handled in court but instead has taken a coordinated social media action to attempt to damage FDUSD’s position as a business competitor. FDT will take legal action to protect its rights and reputation.

Please refer to the verification report link attached to this statement. We will hold an AMA on X Spaces on April 3, 2025 (Thursday) at 4 PM Hong Kong time to address this issue.”

What is Hong Kong First Digital?

First Digital is a financial services company headquartered in Hong Kong, focusing on providing digital asset-related solutions for global enterprises and individuals. Founded in 2019, the company aims to bring traditional trust and custody services into a digital-first world, assisting clients in creating world-class financial products and services through the development of technology and financial service infrastructure.

First Digital’s range of services includes:

Stablecoin Solutions: Issuing and managing FDUSD, a stablecoin fully backed by high-quality assets, designed to optimize financial operations and provide a zero-fee trading experience.
Payments and Settlements: Streamlining daily expenses, cross-border payments, and global payroll disbursement to enhance financial liquidity.
Multi-Asset Custody and Safekeeping: Providing secure and reliable custody services covering over 2,500 tokens and NFTs, supporting 15 major blockchains to ensure asset safety and convenient management.
Structured Trust and Consulting: Offering financial engineering and strategic regulatory expertise to provide tailored structuring and consulting services.

The company’s clientele includes regulated financial institutions and fintech innovators such as blockchain startups, money service businesses, token issuers, market makers, digital asset exchanges, and family offices.

In terms of regulatory compliance, First Digital claims to fully comply with Hong Kong’s Anti-Money Laundering and Counter-Terrorism Financing Ordinance and holds a license under Section 8 of the Hong Kong Trust Ordinance. Additionally, the company has obtained SOC1 Type 2 and SOC2 Type 2, ISO 27001 certifications, as well as FATCA and AEoI compliance.

FDUSD is the fifth largest stablecoin

FDUSD currently ranks as the fifth largest by circulating market capitalization, with approximately $2.57 billion:

Risk Warning

Investing in cryptocurrencies carries high risks, with prices potentially fluctuating dramatically, and you may lose all your principal. Please carefully assess the risks.