Binance sits to benefit from First Digital listing

First Digital Trust, the firm behind the FDUSD stablecoin, announced early last month that it had signed a business combination agreement that would result in it being publicly listed, with a closing expected next year.

The announcement comes after the market capitalization of its flagship product, FDUSD, collapsed, losing over $4 billion since its peak in April 2024.

Binance is in a good position to benefit from this public listing, as a Binance-related entity, Alphanest Holdings, is a major warrant holder in this firm.

FDUSD’s market cap has collapsed, losing over $4 billion since its peak in April 2024.

Alphanest is currently owned by Binance Holdings (IE) Limited and was previously owned by Binance founder Changpeng Zhao, who was recently released from prison.

This warrant, if executed, will result in this Binance entity holding approximately one-quarter of the equity in this firm after the merger.

In anticipation of this potential merger and in light of the recent difficulties for both First Digital and Binance, Protos took a deep dive into the finances and information that have been shared so far.

Falling revenue, growing loss

The market cap collapse of FDUSD is only one of the financial difficulties that First Digital Trust is facing, with its revenue also falling substantially. The firm will have a pre-money valuation of $250 million for this merger.

First Digital’s provided investor presentation shows that for fiscal year 2025 (which it concluded on June 30, 2025), it had $87 million in revenue, and for its unaudited 2026 revenue (which presumably also ended in June), it has merely $27 million.

Even worse than that, the chart shows that for 2025 it had a net revenue of $6 million, $10 million more than the net revenue loss of $4 million for 2026.

Screenshot of First Digital investor presentation.

Its adjusted operating loss also increased from $17 million to $19 million.

As it notes, “FDUSD revenue is driven by reserves in cash and equivalents,” and since the market capitalization of its stablecoin has been falling, we would also expect its returns from that stablecoin’s reserves.

This problem is compounded by the fact that the supply of FDUSD has fallen by approximately another $50 million since June 30.

It’s holdings are also intensely concentrated in Binance-labeled wallets, with approximately 90% of the FDUSD on Ethereum being in Binance-labeled addresses. This represents approximately $170 million in value and is replicated across chains.

On Sui, there are approximately $43 million FDUSD in a Binance-labeled wallet.

Protos believes approximately 80% of all FDUSD is held in Binance wallets.

Fighting with Justin Sun

First Digital Trust’s investor relations page lists its defamation lawsuit against Justin Sun as a material legal proceeding for the firm.

This lawsuit is in response to Sun’s allegations about the firm.

Sun and Techteryx — a firm related to TrueUSD — had previously sued First Digital Trust over allegations that First Digital had misappropriated the reserves for TrueUSD.

The legal battles of Justin Sun

Read more: TUSD up to 99.7% backed by speculative assets despite SEC settlement

Sun went beyond the allegations in that lawsuit and also took to X to air out his claim that “It’s evidently the case that First Digital Trust(FDT) is unable to fulfill client fund redemptions and effectively insolvent.”

This led to First Digital initially stating on X that “every FDUSD is securely backed 1:1 by cash and cash equivalents” and adding that the firm “remains fully solvent.”

Subsequently, First Digital filed its suit against Sun.

It’s evidently the case that First Digital Trust(FDT) is unable to fulfill client fund redemptions and effectively insolvent. However, it continues to operate under the cover of a public trust in Hong Kong despite the major irregularities. There seem to be obvious loopholes in…

— H.E. Justin Sun (@justinsuntron) April 2, 2025

Read more: First Digital defends FDUSD from Justin Sun’s attacks

First Digital has also recently settled with Archblock and TrueCoin, two of the firms that previously operated TrueUSD, as part of the Archblock bankruptcy .

Techteryx has filed for a Chapter 11 trustee to be appointed in the Archblock bankruptcy case.

It accuses Archblock of “ultimately defrauding Techteryx for the benefit of a corrupt set of foreign purported investment entities, which in turn paid lucrative commissions to the fraud’s participants.”

Techteryx is trying to allude to its allegations that Legacy Trust (a somewhat-precursor vehicle to First Digital) and First Digital had misappropriated TrueUSD reserves by directing them to the Aria Fund.

Binance, which recently was hacked for several billion dollars worth of value, could soon become a major shareholder in a publicly-listed stablecoin issuer.

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