Justin Sun’s Allegations Lead to 9% Depeg of FDUSD Stablecoin
FDUSD, a stablecoin with a market cap of $2.5 billion, experienced a significant depeg to $0.91, losing approximately $200 million in market cap before recovering. This event was triggered by Justin Sun's allegations against First Digital, the issuer of FDUSD, claiming insolvency and inability to fulfill redemptions.
Key points:
- Sun accused First Digital of being effectively insolvent.
- A lawsuit from Techteryx alleges mismanagement of $456 million by First Digital.
- First Digital denied the claims, asserting that FDUSD is solvent and backed by US Treasury bills.
- Sun's statements included a link to a CoinDesk article about the lawsuit against First Digital’s CEO.
- Aave has frozen FDUSD deposits and borrowing on its platform as a precaution.
- 95% of FDUSD supply is held by Binance.
First Digital plans to pursue legal action to defend its reputation. The incident highlights risks inherent in stablecoin design and counterparty trust issues.