Justin Sun steps in amid TUSD reserve crisis as FDT denies bankruptcy claims

Justin Sun funds TUSD amid a $456M reserve crisis. First Digital Trust (FDT) denies insolvency claims and calls the claims a smear campaign. FDT’s FDUSD stablecoin depeged, dropping 12%, amid the market turmoil. The cryptocurrency world is no stranger to drama, and the latest chapter involves Tron founder Justin Sun stepping into a financial storm […] The post Justin Sun steps in amid TUSD reserve crisis as FDT denies bankruptcy claims appeared first on CoinJournal.

Apr 3, 2025 - 07:32

Justin Sun steps in amid TUSD reserve crisis as FDT denies bankruptcy claims

Justin Sun funds TUSD amid a $456M reserve crisis.
First Digital Trust (FDT) denies insolvency claims and calls the claims a smear campaign.
FDT’s FDUSD stablecoin depeged, dropping 12%, amid the market turmoil.

The cryptocurrency world is no stranger to drama, and the latest chapter involves Tron founder Justin Sun stepping into a financial storm surrounding TrueUSD (TUSD).

Recent court documents from Hong Kong revealed that TUSD, a stablecoin meant to maintain a steady $1 peg, faced a staggering $456 million reserve crisis between mid-2023 and early 2024.

TUSD’s woes trace back to broader challenges, including the 2023 collapse of its US custodian, Prime Trust, and a 2024 SEC settlement with TrueCoin and TrustToken for misleading investors about its dollar backing.

What happened to TrueUSD (TUSD)?

Techteryx, the company behind TUSD since acquiring it from TrueCoin in 2020, discovered that its reserves, managed by Hong Kong-based First Digital Trust (FDT), had been funneled into illiquid investments.

These funds, intended for the Aria Commodity Finance Fund, were instead redirected to Dubai-based Aria Commodities DMCC, leaving Techteryx unable to access the cash needed to back its stablecoin.

FDT’s CEO, Vincent Chok, has, however, pushed back, insisting his firm followed Techteryx’s instructions and denying any wrongdoing.

Amid the TrueUSD (TUSD) reserve crisis, Sun, a polarizing figure in the crypto space, has stepped in to provide emergency funding to stabilize TUSD, ensuring its peg held firm and user confidence remained intact.

Sun’s intervention stirs controversy

Sun’s intervention wasn’t just a financial lifeline; it was a calculated move to protect the broader stablecoin ecosystem.

With Sun’s support structured as a loan, Techteryx set aside 400 million TUSD to quarantine the troubled reserves, allowing retail redemptions to continue uninterrupted.

While Sun later explained his actions, stating that maintaining trust in stablecoins is critical to their survival, his involvement has reignited scrutiny of his role in TUSD, especially given past denials of direct ownership amid allegations of clandestine acquisitions.

FDUSD stablecoin depegs after finding itself in the crossfire

The fallout from this saga didn’t stay confined to TUSD. On April 2, 2025, Sun took to social media, accusing FDT of insolvency and claiming it couldn’t redeem $501 million in TUSD reserves—a figure slightly higher than the $456 million cited in court documents.

Notably, Sun’s allegations painted FDT as a sinking ship, urging users to secure their assets and calling for Hong Kong regulators to intervene.

First Digital Trust (FDT) is, in fact, already insolvent. This is a factual statement, devoid of any emotion. If you have any ties with them, please sever them as soon as possible to protect your assets. As for what consequences its founder, Vincent Chok, will face for his…
— H.E. Justin Sun