‘Typical Justin Sun smear campaign’: First Digital denies allegations, threatens legal action

First Digital Trust, the issuer of the FDUSD stablecoin, has refuted recent allegations by Justin Sun. 

First Digital Trust labeled the allegations as false and unrelated to its operations. In a statement on X, FDT clarified that the controversy involves TrueUSD, not FDUSD fdusd-0.02% First Digital USD.

“This dispute is with TUSD and not with $FDUSD. First Digital is completely solvent,” FDT posted.

The firm emphasized that FDUSD is fully backed by U.S. Treasury bills, with reserve details transparently outlined in its attestation reports.

Justin Sun’s insolvency claims

On April 2, Justin Sun claimed that First Digital Trust was insolvent after mismanaging nearly $456 million in TrueUSD reserves. 

Legal filings revealed that the funds were diverted into unauthorized investments, prompting Sun to provide emergency funding to Techteryx.

“This is a typical Justin Sun smear campaign to attack a competitor,” FDT stated, accusing Sun of attempting to damage its business through a coordinated social media effort rather than allowing the TUSD dispute to be resolved in court.

FDT reaffirmed its solvency and the security of FDUSD reserves, adding that all funds are accounted for with verifiable ISIN numbers. 

The company also announced plans to take legal action to defend its rights and reputation.