Fiat-backed stablecoin FDUSD came under market pressure on April 2 after Tron founder Justin Sun alleged that First Digital Trust (FDT) is financially insolvent. According to Sun’s post on X, FDT cannot meet its obligations due to major failures in internal risk control and weaknesses in Hong Kong’s trust licensing system.
Sun called on local regulators and law enforcement to intervene immediately. He warned that continued inaction could harm Hong Kong’s credibility as a global financial center and lead to more investor losses.
FDUSD, which is backed by U.S. dollars and supported by Binance, lost its peg following the announcement. The token fell to 97 cents and dropped to 91 cents before recovering. With a fully diluted valuation of approximately $2.54 billion and a daily trading volume of $6.9 billion, the stablecoin’s price swing raised concerns across the market.
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Retail Investor Reactions Fuel Concerns Over Market Inequality
The vulnerability faced by FDUSD led crypto community members to demonstrate a widening gap between investors who trade at different levels: institutions and individuals. Binance possesses sufficient financial resources to compensate users whose funds got lost in FDUSD, according to X user @xtony1314 (逍遥XTony). During the price dip, he invested his funds into 200,000 FDUSD, which indicates that certain traders found beneficial opportunities in the market instability.
User @yuyue_chris (uyue) expressed their disappointment about what they perceived as investor discrimination based on the scale in their responses. He alleged that Binance comforted wealthy clients about asset security while retail investors continued to experience losses. According to this user, BNB whales increased their positions to benefit from the debugged situation, which raised doubts about Binance’s operation.
Through tagging prominent Binance figures such as @sisibinance, @yaya_bnb, and @heyibinance, he escalated public condemnation concerning the exchange’s management of the issue. The recent backlash demonstrates ongoing public worries related to equity, open disclosure, and imbalances of power within the crypto market.
Binance co-founder Yi He delivered her response when the online dialogue about this matter spread. Binance keeps a close watch on the situation, according to Yi He, who also stated users can trust in the protection of their funds. The co-founder Yi He of Binance disclosed that Justin Sun started a legal battle against TrueUSD (TUSD), which has 495 million dollars in market value and conducts 56 million dollars of trades daily.
Market-related trust among investors remains delicate because Binance must deliver better updates and additional security measures when markets experience instability.
Conclusion
The FDUSD depegging incident has brought renewed attention to risk management in the stablecoin sector. As investigations unfold, the crypto community continues to watch how exchanges and custodians handle regulatory scrutiny and market fairness.
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