Prominent figure Justin Sun has raised alarm bells over the alleged insolvency of First Digital Trust (FDT), a Hong Kong-based financial institution within the Tron ecosystem. Sun, known for his active presence in the blockchain space, revealed on April 2nd that FDT’s internal risk management system and licensing process are riddled with significant flaws, rendering it unable to fulfill its obligations. He urged regulatory bodies and law enforcement agencies to address this situation swiftly to prevent further financial loss and protect Hong Kong’s position as a global financial hub. Sun plans to hold a press conference on April 3rd to delve deeper into the unfolding crisis. This news has rippled through markets, causing FDUSD, a fiat-backed stablecoin directly supported by Binance exchange, to plummet over 2% – trading at approximately 97 cents at the time of this writing – before recovering slightly. The mid-cap stablecoin with a fully diluted valuation of about $2.54 billion and daily average trading volume of around $6.9 billion has depegged for the first time to as low as 91 cents, before Yi He, co-founder of Binance, clarified the situation. He addressed concerns surrounding Sun’s lawsuit against TrueUSD (TUSD) while also affirming Binance’s dedication to customer safety and proactive risk management measures. Binance has been actively working to monitor and understand the situation, engaging with other parties in the market throughout the night.