Binance has reasserted the precision of the FDUSD reserve attestation for February after concerns arose from a brief de-pegging incident.
In an April 3 post on its blog, Binance announced that it had reviewed the reserve data for First Digital USD (FDUSD) twice: first after the release of the February report and again recently to confirm its integrity.
According to the audit conducted by Prescient Assurance, as of March 1, FDUSD held $2.05 billion in reserves. These reserves, stored in fixed deposits and U.S. Treasuries, exceed the stablecoin’s circulating supply, ensuring a 1:1 backing with USD.
This update follows allegations by Tron (TRX) founder Justin Sun, who claimed that First Digital Trust, the issuer of the stablecoin, was insolvent. His accusations led to a temporary dip in FDUSD’s value, dropping it by 5%. Sun demanded regulatory intervention, criticized the financial framework in Hong Kong, and urged investors to withdraw their assets.
Sun’s remarks incited panic selling, causing FDUSD to plummet to as low as $0.87 before it managed to recover. In response, First Digital Trust firmly denied the allegations, asserting that FDUSD is fully backed and claiming that Sun’s statements were misleading.
The company maintained that the issue was not related to FDUSD, but instead stemmed from a conflict concerning TrueUSD (TUSD), another stablecoin under its management. FDT also accused Sun of orchestrating a smear campaign against the firm and suggested potential legal action against him.
With Binance controlling about 94% of the FDUSD supply, this situation has raised concerns regarding the exchange’s risk exposure. Several industry analysts have highlighted the potential pitfalls of relying heavily on a single stablecoin for crucial trading pairs.
As of this writing, FDUSD appears to have stabilized, trading at $0.99 amid market fluctuations. Binance has signaled its intention to conduct another review following the upcoming attestation report in two weeks and has reiterated its dedication to monitoring the stability of FDUSD.