- Justin Sun provides emergency funding to TrueUSD (TUSD) amid a reported $456 million reserve shortfall.
- Hong Kong custodian First Digital Trust (FDT) denies insolvency allegations and calls the claims a smear campaign.
- FDT’s FDUSD stablecoin briefly depegged, falling about 12% during the market turbulence.
The cryptocurrency sector has once again confronted a major crisis after Tron founder Justin Sun intervened to stabilize TrueUSD (TUSD). Court filings from Hong Kong reveal that TUSD—intended to maintain a steady $1 peg—faced a reported $456 million reserve shortfall spanning mid‑2023 to early 2024.
TUSD’s problems appear tied to broader fallout in the industry, including the 2023 collapse of custodian Prime Trust and a 2024 U.S. SEC settlement with TrueCoin and TrustToken over misleading claims about dollar backing.
What happened to TrueUSD (TUSD)?
Techteryx, the company that acquired TUSD from TrueCoin in 2020, discovered that the reserves held to back the stablecoin and managed by Hong Kong‑based First Digital Trust (FDT) were placed into illiquid investments. Funds originally destined for the Aria Commodity Finance Fund were reportedly redirected to Dubai‑based Aria Commodities DMCC, leaving Techteryx unable to access sufficient liquid assets to fully back TUSD redemptions.
FDT’s CEO Vincent Chok has disputed allegations of wrongdoing, saying the firm acted on Techteryx’s instructions and denying insolvent behavior.
Amid that reserve shortfall, Justin Sun provided emergency funding to help maintain TUSD’s peg and prevent a broader loss of confidence. Sun’s support was structured as a loan, and Techteryx quarantined 400 million TUSD to isolate the troubled reserves and allow retail redemptions to continue.
Sun’s intervention and the controversy it sparked
Sun characterized his move as necessary to defend the stablecoin ecosystem. He later explained that preserving trust in dollar‑pegged tokens is vital for market stability. However, his involvement prompted renewed scrutiny because of previous questions about his ties to TUSD and past denials of direct ownership amid reports of undisclosed acquisitions.
FDUSD depegs amid the fallout
The dispute spilled over beyond TUSD. On April 2, 2025, Sun publicly accused FDT of insolvency, claiming the custodian could not redeem roughly $501 million in TUSD reserves—a figure slightly higher than the $456 million cited in the court filings. He urged users to secure their assets and called for Hong Kong regulators to investigate.
The remarks triggered a sharp market reaction: FDUSD, a separate stablecoin issued by FDT, fell as much as 12%, dropping from $1 to about $0.87 before recovering to roughly $0.9887. That depeg erased an estimated $130 million in market value and drew attention to FDUSD’s listing and trading volume on major exchanges.
Market observers reported a rapid response from major trading firms. For example, the trading firm Wintermute reportedly withdrew 31.36 million FDUSD from Binance within 30 minutes, a move that analysts interpreted as an attempt to stabilize the token during the volatility. This accumulation made Wintermute one of the top holders of FDUSD among exchanges and institutions, holding roughly 65.46 million tokens or about 2.5% of the circulating supply.
FDT denies allegations and threatens legal action
FDT pushed back aggressively. In an April 2 statement the company called Sun’s assertions “completely false,” described the posts as a “typical Justin Sun smear campaign,” and insisted the dispute concerns TUSD—not FDUSD. FDT maintained that FDUSD is fully solvent and backed by U.S. Treasury bills, citing attestation reports that include ISIN numbers for the reserve assets.
The firm announced it would host an AMA on X Spaces to address public concerns and warned it might pursue legal action, accusing Sun of bypassing legal channels in favor of a coordinated social media assault intended to damage FDUSD’s reputation.
As the situation develops, market participants and regulators will be watching closely. The episode highlights the fragile interdependencies in the stablecoin ecosystem—where custody arrangements, reserve management, and public trust all play crucial roles in maintaining pegs and protecting users’ funds.