First Digital defends FDUSD from Justin Sun’s attacks
First Digital Trust has taken to X to defend its First Digital USD (FDUSD) stablecoin against attacks from cryptocurrency entrepreneur Justin Sun.
In the statement, First Digital claims that “every FDUSD is securely backed 1:1 by cash and cash equivalents” and adds that the firm “remains fully solvent.”
Additionally, First Digital denies “any and all claims of FDT being involved in a coordinated scheme or misappropriation of funds.”
First Digital is responding to Sun and Techteryx’s (the firm behind TrueUSD) claims that First Digital had misappropriated the vast majority of TrueUSD reserves.
This portion of the reserves, currently totaling over $500 million, has been inaccessible to TrueUSD for an extended period and was also the center of a Securities and Exchange Commission lawsuit.
This suit alleged that the reserves of TrueUSD were mostly invested in a highly speculative fund, despite TrueUSD’s claims that it was “backed dollar-for-dollar.”
Read more: FTX knew Justin Sun tried to acquire TrueUSD
Techteryx has subsequently filed a suit against First Digital Trust and First Digital’s Chief Executive, Vincent Chok, in a lawsuit that alleged that First Digital had inappropriately directed these investments.
After these investments were made, the fund was unable or unwilling to service redemption requests from TrueUSD/Techteryx, and Sun reportedly had to provide a loan to TrueUSD.
It has also led Sun to make the accusation that First Digital is insolvent.
This dispute has also spilled out of the courts, and at least one Hong Kong legislator has commented on it.
However, the statement from First Digital includes a different explanation, noting that the fund that was invested in, ARIA, “has voiced its AML/KYC concerns regarding the buy-out deal between TrueCoin and Techteryx and the identification of the ultimate beneficial owner of Techteryx.”
Former TrustLabs CEO, Daniel Jaiyong An, has previously alleged that Sun tried to acquire TrueUSD with the assistance of Can Sun, a lawyer who later worked with FTX.
However, Techteryx has claimed in public, and in repeated statements to Protos, that Sun is not the ultimate beneficial owner of Techteryx or TrueUSD.
He has, however, been described as an “Asia Market Advisor” by TrueUSD and has described himself as a “partner market maker” for TrueUSD.
Additionally, CoinDesk reporting suggests that he provided the loan to bail out TrueUSD.
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