Binance States "No Issues Beyond Redemption Reserves" Amid FDUSD Price Divergence

# Binance Addresses Temporary Depegging Issue of First Digital USD (FDUSD) Binance has issued an official statement regarding the temporary depegging incident involving First Digital USD (FDUSD), reassuring users about the stablecoin's reserve backing. On November 2 (local time), Binance published a blog post confirming the findings of a re-audit of FDUSD's reserve assets. The audit reconfirmed that the reserves were intact with no issues detected. Depegging refers to the phenomenon where the value of a stablecoin, which is intended to remain fixed to $1, temporarily deviates from its peg. According to Prescient Assurance, the auditing firm tasked with reviewing FDUSD's reserves, as of last month on October 1, the FDUSD reserves amounted to approximately $2.05 billion (roughly 3.044 trillion Korean won). This amount exceeded the total circulating supply of FDUSD, ensuring there are no concerns over the one-to-one redemption of the stablecoin against the U.S. dollar. The reserves reportedly consist of time deposits and U.S. Treasury securities. # Causes of the Market Reaction The incident was triggered by allegations from Justin Sun, founder of TRON(TRX), who claimed that First Digital Trust (FDT), the organization issuing FDUSD, was insolvent. Following his remarks, the price of FDUSD dropped sharply, briefly hitting $0.91 on Binance. Stablecoins rely on their one-to-one parity with the U.S. dollar to maintain market confidence, and any deviation from this peg can heighten instability in the cryptocurrency market. # Binance Under Scrutiny for Heavy Reliance on FDUSD Data from CoinMarketCap indicates that approximately 94% of FDUSD's circulating supply is traded on Binance. While Binance did not issue FDUSD, the market perceives it as closely tied to the exchange due to Binance's significant role in its trading ecosystem. The recent depegging incident has raised concerns about the potential risks of exchanges relying heavily on a single stablecoin. Industry analysts have pointed out the dangers of using one dominant stablecoin in key trading pairs, arguing that this exposes both the exchange and its users to unnecessary risks. If a stablecoin like FDUSD faces severe disruptions, user trust in Binance could also erode. # FDT Denies Allegations, Plans Legal Action In response to the allegations, First Digital Trust (FDT) has firmly denied Justin Sun's claims, describing them as baseless and defamatory. The company has announced plans to pursue legal action for the dissemination of false information and damage to its reputation. FDT clarified that "the issue seems to stem from a dispute surrounding another stablecoin under our management, TrueUSD(TUSD), and is unrelated to FDUSD." The controversy highlights the sensitivity of stablecoin markets, where trust and stability are paramount. As stablecoins represent a critical component of the cryptocurrency ecosystem, ensuring their credibility remains a top priority for issuers and exchanges alike.