Sun Yuchen strikes, FDUSD unpegged: Will FDT be the first thunder in 2025?

Author: Scof, ChainCatcher

Editor: TB, ChainCatcher

The cryptocurrency market has once again been stirred by the "de-pegging" event of a stablecoin.

This time, the protagonist is FDUSD, a stablecoin issued by the Hong Kong trust institution First Digital Trust (FDT), pegged to the US dollar at a 1:1 ratio. Within just one hour, the price of FDUSD dropped from $1 to $0.97, and at one point fell to nearly $0.88, resulting in the evaporation of hundreds of millions of dollars in market value. More concerning is that the cause of this turmoil was not a technical flaw or external attack, but rather an "unverified" accusation on social media.

Event Review: A Single Statement by Sun Yuchen Ignites De-pegging

On the evening of April 2, prominent figure in the crypto industry, Sun Yuchen, tweeted on social platform X, claiming that the issuer of FDUSD, FDT, had actually gone bankrupt and was "unable to redeem," implying that it might be insolvent. This statement quickly spread throughout the crypto community, leading to a sharp deterioration in market sentiment. Just one minute later, the price of FDUSD on Binance plummeted below $1, and panic spread across the market.

Investors began to sell off FDUSD in large quantities, with some users even experiencing panic-driven asset swaps. Within an hour, the trading volume of the FDUSD/USDT trading pair reached 770 million tokens, with a transaction value of $745 million. The market was thrown into chaos.

It is reported that FDUSD is commonly used in Binance's Launchpool projects, where users can lock FDUSD to mine new token rewards. At the same time, FDUSD is also a major alternative to Binance's native stablecoin BUSD.

In response to the de-pegging event, FDT issued a statement early that morning, firmly denying the bankruptcy rumors, stating that its reserve assets were sufficient and that all FDUSD were backed by cash or US Treasury bonds, fully complying with the 1:1 peg requirement. FDT also emphasized that the root cause of the issue was not FDUSD, but rather a reserve dispute involving another stablecoin, TUSD.

Additionally, a Binance member, SiSi, responded in a user group, stating, "FDUSD can be redeemed 1:1," pointing out that this was a statement from He Yi. Although this was not an official public statement, the news spread rapidly in the community, and the price of FDUSD subsequently rebounded to around $0.98.

According to reserve proof data from First Digital Trust's official website, as of February 2025, FDT's reserve assets were approximately $2.05 billion, while the circulation of FDUSD was 2.04 billion tokens, resulting in a reserve coverage ratio of over 100%. On paper, FDT "is not short of money."

Deeper Background: Old Grudges Between Sun Yuchen and FDT?

The turmoil surrounding FDUSD is actually a continuation of an old grudge.

FDT is not the first time to be named by Sun Yuchen. Previously, FDT was sued by Techteryx due to serious issues in managing TUSD (TrueUSD) reserves. Court documents revealed that part of TUSD's reserve funds were transferred to the unauthorized entity Aria Commodities DMCC during FDT's custody, resulting in a nearly $500 million funding shortfall. Ultimately, it was Sun Yuchen who stepped in to provide emergency liquidity support for TUSD in the form of a loan, filling this gap.

This "bailout" was clearly not free. Sun Yuchen subsequently began to question FDT's asset safety, accusing it of chaotic and opaque management, even directly stating that FDT "is unable to redeem." FDT, on the other hand, insisted that it was merely a custodian, and all operations were conducted according to Techteryx's instructions, countering that Sun Yuchen was attempting to undermine competitors through smear tactics.

Renowned industry analyst Mirror Tang pointed out that this type of "regulatory black hole" asset misappropriation is not just a one-time operational error, but a manifestation of structural risks in stablecoins. He warned that the market currently has rigid expectations for Binance's redeemability, but once underlying assets encounter problems, the platform's reliance on credit for support may only provide short-term relief while amplifying moral hazard in the long run. He bluntly stated, "Platform credit is not infinite; if repeatedly held hostage by projects, the consequences will be extremely severe."

Moreover, TUSD has faced redemption difficulties multiple times over the past year, and its original operator, TrueCoin, reached a $500,000 settlement with the SEC for alleged false advertising. A series of negative news has exacerbated market concerns about FDT's overall credibility.

Who is FDT?

First Digital Trust (FDT) is the issuer and reserve custodian of FDUSD, founded and led by CEO Vincent Chok. He previously served as the head of Legacy Trust and has a background in Canadian real estate financing, as well as being active in the crypto asset sector, promoting the issuance of FDUSD.

COO Gunnar Jaerv is primarily responsible for technology and products, having previously managed digital asset operations at Legacy Trust and being a key figure in the company's technical architecture.

According to public data, FDT's parent company is First Digital Group, which is also headquartered in Hong Kong. This company can be traced back to Legacy Trust, established in 1992, which serves high-net-worth clients as a family office institution.

Initially, FDT was part of Legacy Trust's digital asset custody business, providing a comprehensive suite of solutions including digital asset custody, trust services, API payment channels, and stablecoin issuance management. The issuer of FDUSD, FD121 Limited, is also one of the subsidiaries of First Digital Group.

In the crypto industry, FDT is considered a "hybrid" company that has both traditional financial backgrounds and benefits from blockchain. Public information shows that FDT completed a $20 million funding round in May 2022, with participants including Nogle (an early investor in Telegram) and local blockchain venture capital firm Kenetic Capital.

Although the amount is not large, FDT may connect the crypto capital and high-net-worth resources in the Asia-Pacific region based on its background.

Although It Has Re-pegged, Doubts Remain

As of the time of publication, according to Lookonchain monitoring, the market maker Wintermute has purchased over 30 million FDUSD at $0.90, making a profit of over $3 million.

Although FDUSD has re-pegged in a short time, there are still many doubts behind this de-pegging event. The core question is: Does FDT actually have the ability to redeem? This trust institution that issues stablecoins has extremely limited public information, and even audit reports have not been disclosed.

Sun Yuchen claims "insolvency," while FDT responds "completely false," but has not revealed the specific asset composition or its liquidity status, leaving the outside world unable to verify. Investors can only make judgments in an information vacuum, and the cost of such judgments often results in emotional panic and sell-offs.

On the other hand, FDUSD is now widely adopted by Binance, having already replaced BUSD as one of the main stablecoins. If FDT truly has liquidity issues, the impact will far exceed FDUSD itself and could potentially cause systemic shocks to the entire market. The chain reaction triggered by the LUNA crash is still fresh in memory, and trust in stablecoins was already precarious; this incident with FDUSD serves as yet another alarm bell.

For stablecoins to remain stable, it requires not only asset reserves but also institutional transparency, equal information access, and clear boundaries of authority. In the current turmoil, what investors need most is not a vague reassurance but a clear, verifiable, and accountable mechanism.

Crypto KOL YuYue also pointed out that in the face of such a large-scale stablecoin crisis, Binance did not respond through a formal announcement, but rather through scattered comments from employees in WeChat groups, only replying in some large user groups, raising questions about information asymmetry and even "de facto insider trading." More controversially, a single statement from core platform employees at a critical moment can significantly influence market direction; should such statements be subject to stricter constraints? As an exchange deeply tied to FDUSD, does Binance have a responsibility to proactively investigate and publicly respond?

In this "troubled autumn," will FDT become the "first thunder" of 2025? ChainCatcher will continue to follow up on related content.