- Binance introduces a new stablecoin, First Digital USD, prompting questions of credibility and potential links to Justin Sun.
- Crypto researcher, Adam Cochran, raises concerns about the stablecoin’s custodian, hinting at a possible connection with Justin Sun.
Binance’s First Digital USD: Tracing a Controversial Path
Today, Binance, the pre-eminent crypto exchange, welcomed a new member to its stablecoin family, First Digital USD (FDUSD). This Hong Kong-based digital asset, issued by First Digital Trust, has created waves of intrigue and controversy across the crypto landscape, with allegations connecting FDUSD to Tron’s Justin Sun, already allegedly associated with TrueUSD (TUSD). These uncertainties have left crypto enthusiasts questioning FDUSD’s credibility.
On June 1, the First Digital Group took to the stage, announcing the birth of FDUSD. Pegged to the U.S. dollar, this stablecoin — first issued on the Ethereum and Binance Smart Chain (BNB) networks — vows to provide users with an efficient and reliable transactional method. As it stands, the total circulation of FDUSD hovers around 10.11 million, with over 99.9% nestled within Binance wallet addresses.
Casting Doubts on Binance & Justin Sun
Adam Cochran, a crypto researcher and vocal critic of Binance and Justin Sun, responded swiftly to FDUSD’s debut. His concerns revolved around the custodian behind FDUSD and its potential ties to Justin Sun. He posited that the stablecoin could be issued without adequate asset backing, casting shadows over its true worth. Cochran’s tweet paints a vivid picture:
“This [FDUSD] is issued by the sketchy custodian that Justin Sun uses for TUSD. They issue against value, not assets. So like illiquid paper equity, goodwill, Justin Sun’s promises, etc.”
He went further, alleging that this might be a rebranding attempt by Sun and Binance CEO Changpeng Zhao. Cochran even speculated that TUSD could start migrating to FDUSD, receiving special treatment from Binance as a protective measure, dubbing it a
“condom for your stablecoin crime.”
These doubts echo in the tweet of another user, who questioned First Digital’s compliance with the Securities and Futures Commission (SFC). Cochran concurred, expressing his doubts about their monetization plans given the stringent regulations of Hong Kong’s Trust Ordinance.
Ki Young Ju, CEO of CryptoQuant, joined the discourse, requesting proof of the connection between Justin Sun and First Digital Trust. Cochran provided a screenshot of their website and auditor statements as evidence. Thus far, Justin Sun and Binance have remained silent about Cochran’s allegations.
As per First Digital’s announcement, FDUSD is backed by “high-quality reserves” of cash and equivalents held in regulated Asian financial institutions. Registered under Hong Kong’s Trust Ordinance, First Digital Trust is obliged to hold all reserves in segregated accounts, preventing asset commingling.
At the time of writing, Cochran has also alleged that Justin Sun is involved with TUSD and the Seychelles-based cryptocurrency exchange Huobi. His latest claims revolve around 60,000 unbacked bitcoin (BTC) on the Tron blockchain, a portion of which was supposedly converted into stablecoins by Sun to acquire Huobi. Amidst these controversies, Tron’s (TRX) price sits at $0.0871, up 10% in the last 30 days.