FDUSD Loses Peg Following Justin Sun's Raising of Solvency Issues Regarding First Digital Trust
Justin Sun charged First Digital Trust (FDT) with not being able to redeem TUSD reserves totaling $502 million.
FDT, FDUSD's issuer, said redemption delays stemmed from AML/KYC problems.
From its dollar peg, FDUSD plummeted 5%, therefore wiping out $130 million in market value.
Following public claims by Justin Sun on Tuesday, FDUSD, the stablecoin created by First Digital Trust (FDT), dramatically deperessed from the US dollar.
The coin dropped five percent, which reduced its market valuation by $130 million.
Sun, who founded Tron and connected with the TrueUSD (TUSD) ecosystem, said that FDT, in charge of TUSD reserves, denied to redeem $501 million in client money. He further said the corporation was "bankrupt" and unable of meeting its responsibilities.
FDT responded by saying that its actions were based on anti-money laundering (AML) and know-your-customer (KYC) compliance concerns, notably mentioning issues about the ultimate beneficial ownership of the monies at issue.
The debate set trading pairings involving FDUSD in flux. The BTC/FDUSD pair traded on Binance at a premium about $6,000, compared to other marketplaces.
One of the main stablecoins supported by Binance is FDUSD, hence any continuous problems with solvency or redemption might have wider effects on exchange trading pairs and liquidity operations.