Justin Sun announced that First Digital Trust, a financial institution from Hong Kong, faced insolvency, which may affect Hong Kong's reputation as a financial center.
Justin Sun's Statement
On April 2nd, in an X post, Justin Sun, a key figure in the Tron (TRX) ecosystem, announced the insolvency of First Digital Trust (FDT), a financial institution based in Hong Kong. Sun noted significant shortcomings in FDT's internal risk management systems and licensing processes. He urged regulators and law enforcement to take swift action to prevent financial loss and safeguard Hong Kong's reputation as a global financial hub.
Market Impact
Following the announcement, the value of FDUSD, a fiat-backed stablecoin from Binance, dropped by over 2 percent. FDUSD, with a fully diluted valuation of $2.54 billion and an average daily trading volume of about $6.9 billion, depegged for the first time to 91 cents.
Binance's Response
Yi He, co-founder of Binance, noted that Justin Sun is suing TrueUSD (TUSD). He mentioned that Binance is monitoring the situation carefully and conducting regular fund checks.
"No one knew that Brother Sun would tweet in the middle of the night, but Binance launched stablecoins. We will check the funds regularly and we have our own risk control. Binance post-listing is also looking for fdusd, trying to understand the situation, and calling people in the middle of the night. We are just making logical judgments," He noted.
The insolvency of FDT is causing significant market unrest. While stakeholders work to understand the situation, Binance and other parties continue to monitor and assess the impact on the financial ecosystem.
