First Digital Trust (FDT), the issuer of the FDUSD stablecoin, has denied recent allegations from Justin Sun, and has said it will take legal action to protect its reputation.

First Digital Denies Allegations, Says FDUSD Has No Involvement in TUSD Dispute
In a statement on X, First Digital dismissed Sun’s allegations, calling them a “typical smear campaign” aimed at attacking a competitor. The company clarified that the dispute involves TrueUSD (TUSD), not FDUSD, and that FDT is fully solvent.

“This dispute is with TUSD, not FDUSD. First Digital is fully solvent,” FDT asserted.

The unit also emphasized that FDUSD is fully backed by US Treasury bonds, with full information about reserves clearly stated in the certification reports.

Justin Sun Accuses First Digital of Insolvency
On April 2, Justin Sun announced that First Digital Trust had become insolvent after mismanaging nearly $456 million in TrueUSD reserves. According to legal filings, the money was diverted into unauthorized investments, forcing Sun to provide emergency funding to Techteryx – the company that controls TrueUSD.

However, First Digital quickly denied this information, accusing Sun of intentionally harming its business through social media campaigns instead of letting the TUSD dispute be resolved in court.

FDT Announces Legal Action
In order to protect its reputation and interests, First Digital announced that it would take legal measures against Sun's accusations. The company claims that all FDUSD reserves are marked with a verifiable ISIN, ensuring transparency and security.

First Digital’s next move could be a formal lawsuit against Justin Sun if the dispute continues to escalate. Meanwhile, the stablecoin market and the crypto community will be closely watching the developments, as it could impact confidence in both FDUSD and TUSD.