Tron founder Justin Sun has escalated concerns around First Digital Trust (FDT), labeling its current scandal “significantly worse than FTX.” The controversy involves the alleged unauthorized transfer of $456 million from TrueUSD (TUSD) custodial reserves, raising red flags across the crypto and regulatory spheres.
In a post published on April 5 via platform X, Sun claimed the situation at FDT mirrors the pre-collapse mismanagement at FTX, but with deeper implications for institutional credibility. Unlike FTX’s well-known use of affiliated tokens as loan collateral, Sun accuses FDT executives of siphoning funds to a fraudulent Dubai entity for laundering purposes.
The stablecoin FDUSD, partially linked to the trust, briefly depegged amid market panic. Though it has since recovered to above $0.99, the reputational damage remains a growing concern.
Justin Sun Offers $50M to Recover Funds
In a direct response to the alleged misconduct, Sun has announced a $50 million bounty aimed at recovering the stolen funds and holding those responsible accountable.
Sun’s public accusations triggered swift attention from Hong Kong lawmakers, who pledged to pursue enforcement action if the claims are validated. The Tron founder warned that inaction could undermine Hong Kong’s standing as a financial center, especially as it promotes its ambitions in digital assets.
Sun highlighted key differences between FTX and FDT:
- FTX: Misappropriated customer funds were disguised as collateralized loans
- FDT: Funds were allegedly sent to offshore shell firms for laundering
- FTX Founder SBF: Never used customer funds for personal luxury
- FDT CEO Vincent Chok: Allegedly used TUSD reserves for personal gain
FDT has denied all allegations, describing them as “malicious fabrications” intended to damage its reputation. It asserts solvency and insists that legal action is forthcoming to counter Sun’s claims.
Hong Kong’s Financial Integrity Under Fire
The controversy has broader implications beyond crypto markets. Sun argues the scandal jeopardizes Hong Kong’s efforts to present itself as a credible, transparent hub for financial innovation.
“The U.S. acted swiftly in the FTX case,” Sun noted. “Hong Kong must now do the same.”
Failure to act decisively could trigger long-term confidence issues among global investors, especially as jurisdictions compete for dominance in digital asset custody.
With the $456 million dispute unresolved, market participants are watching closely for regulatory intervention, legal proceedings, or further disruptions to stablecoin trust.
