Binance confirms FDUSD reserves are accurate after depegging

Binance has reaffirmed the accuracy of FDUSD’s reserve attestation for February, following concerns sparked by a brief de-pegging event.

In an Apr. 3 update on the company’s blog, Binance stated it had reviewed  First Digital USD’s (FDUSD) reserve data twice, once after the February attestation report was released and again recently to ensure accuracy.

As of Mar. 1, FDUSD had $2.05 billion in reserves, according to the audit, which was carried out by Prescient Assurance. These reserves, which are kept in fixed deposits and U.S. Treasuries, are greater than the amount of stablecoin in circulation and guarantee a 1:1 redemption with USD.

The update comes after Tron (TRX) founder Justin Sun accused the stablecoin’s issuer, First Digital Trust, of being insolvent, causing FDUSD to momentarily lose its peg and drop by 5%. Sun called for regulatory action, criticized Hong Kong’s financial system, and advised investors to withdraw their funds.

His claims caused panic selling, which led to FDUSD’s price dropping as low as $0.87 before recovering. In response, FDT refuted the claims, claiming that Sun’s remarks were deceptive and that FDUSD is fully backed.

The company insisted the issue was unrelated to FDUSD and instead linked to a dispute involving TrueUSD (TUSD), another stablecoin it manages. FDT also accused Sun of launching a smear campaign against its business and has threatened to take legal action against him.

Given that Binance owns roughly 94% of the supply of FDUSD, the situation has sparked worries about the exchange’s exposure. Some industry analysts have pointed out the risks of relying on a single stablecoin for key trading pairs.

As of the time of press, FDUSD seems to have stabilized, trading at $0.99 despite market volatility. Binance intends to carry out another review after the next attestation report is published in two weeks and has reiterated its commitment to keeping an eye on the FDUSD’s stability.