FDUSD Controversy Erupts: Justin Sun Accuses Issuer of $500M Fraud in High-Stakes Showdown

The FDUSD controversy has surfaced as the new hot topic in the crypto world as Tron founder Justin Sun came out accusing First Digital Trust (FDT), the issuer of the FDUSD stablecoin, of misappropriating client funds amounting to $500 million. Sun denounced it as an international fraud of major proportions and asserted that FDT is insolvent and mismanages assets under the garb of public trust.

These assertions incidentally led to FDUSD breaking its peg to the dollar and plummeting to $0.87 before climbing back to $0.99 shortly after the claims. Sun reported the incident to Hong Kong authorities, yet FDT vehemently denied the claims as a baseless smear campaign and is pursuing legal recourse to defend its good name.

FDUSD Controversy: Justin Sun’s $500M Fraud Allegations Shake Crypto Industry

Tron founder Justin Sun has called First Digital Trust (FDT), which issues the FDUSD stablecoin, a $500 million embezzler of client funds, igniting a major controversy in the crypto world. Sun describes it as international financial fraud, claiming it is bankrupt and mismanages assets on behalf of the public trust. The allegations temporarily caused FDUSD to unpeg with the dollar, going down to $0.87, before regaining value to $0.99.

Sun lodged a report regarding the issue with the Hong Kong regulators and judicial authorities, meeting with legislator Johnny Wu, who confirmed raising the issue during a session in the Legislative Council. Wu highlighted the good standing of Hong Kong’s strong legal system while trying to reassure the international community of the stability of the region. Sun also hosted a live podcast to bring out irregularities in the operations of FDT.

FDT has vehemently denied such claims made by Sun, branding them false information and a smear campaign. The controversy has also gained wider allegations about stablecoin governance and transparency, and heightened criticisms about reserve management practices within the crypto ecosystem.

Cardano Price: Navigating Resistance Amidst Shifting Signals

The trading session of April 4 begins with an interplay between bullish and bearish signals. These occurred from 04:35 to 22:00 UTC and suggest a possible downward bias for the Cardano prices. The effect is offset by attempts at recovery, as golden crosses appear on the MACD at about 04:30 UTC and at 13:15 UTC in the day. From these golden crosses, it can be derived that bullish reversals may be imminent. The Relative Strength Index oscillates such that there are times Cardano prices are seen to be oversold when it is recommended to buy, and at other times, it indicates a reversal of price movement.

Chart 1, analysed by anushrivarshney2613, published on TradingView, April 4, 2025

At present, Cardano is trading near a resistance level, probably holding at around 0.667 as in the early hours of April 4. The previous upward trendline was bullish, with price action now reacting with resistance at 0.667. A bullish breakout could develop once resistance above the 0.6700 level is exceeded. Conversely, if the resistance remains intact, a retracement toward the 0.6100 support could be on the cards. Cardano price depends mainly on technical indicators and overall market conditions. Any prediction for the price of Cardano must combine these technical factors and the broader market news with potential impacts from events such as the FDUSD situation.

FDUSD Controversy and Future Market Outlook

The whole controversy on FDUSD regarding allegations by Justin against First Digital Trust has proven that stablecoins are not immune to market sentiment and emphasized the need for transparency in reserve management. Though the FDUSD lost the peg briefly, it seems to have stabilized once again after Binance and First Digital Trust’s reassurances. In contrast to Cardano price analysis, which is often driven by overall market trends and technological news, FDUSD’s future is primarily tied to the solution to this controversy and the integrity of its reserves.