Tron Founder Justin Sun Accuses First Digital Trust of Insolvency

Justin Sun, the founder of Tron, has announced that he will live stream a response to the First Digital Trust event in a few hours. This announcement comes amidst a heated dispute between Sun and First Digital Trust (FDT), the issuer of the stablecoin FDUSD. Sun has accused FDT of insolvency, claiming that the stablecoin is not fully backed by US Treasury bills as asserted by FDT. In response, FDT has denied these allegations, stating that FDUSD is indeed fully backed and threatening legal action against Sun for what they describe as a smear campaign.

The dispute began when Sun, who had previously distanced himself from TUSD, warned users to take immediate action to protect their assets. He claimed that First Digital Trust is effectively insolvent and that users should withdraw their funds. FDT quickly refuted these claims, asserting that their stablecoin is fully backed and that Sun's allegations are baseless. The situation escalated when filings showed that Sun had spent $456 million to bail out TUSD, which had reserves stuck in limbo. Sun has since filed a lawsuit against FDT, alleging misappropriation of reserve funds for investment purposes.

The live stream response by Sun is expected to provide further clarity on the situation and his stance on the allegations. It remains to be seen how this dispute will unfold and what impact it will have on the broader cryptocurrency market. The cryptocurrency community is closely watching the developments, as stablecoins play a crucial role in the ecosystem by providing a stable store of value and a medium of exchange. The outcome of this dispute could have significant implications for the trust and stability of stablecoins in the market.