TRON Founder Accuses FDT of $500M Misappropriation

Justin Sun, the founder of TRON, has intensified his accusations against First Digital Trust (FDT), alleging severe misconduct that he claims surpasses the notorious FTX scandal. Sun asserts that FDT has misappropriated client funds amounting to $500 million, a figure significantly higher than the mismanagement seen with FTX. He contends that unlike FTX, which at least maintained an illusion of structured financial operations, FDT blatantly siphoned off user assets without any consent.

Sun's allegations against FDT, the issuer of the FDUSD stablecoin, highlight a severe breach of trust. He points out that while FTX mismanaged user funds, it at least gave the appearance of a structured financial operation, albeit deceptively. In contrast, FDT's actions represent a fundamental violation of user trust. Sun reported that FDT allegedly diverted around $456 million from TUSD custodial funds without client authorization. This withdrawal was recorded as loans to a dubious entity in Dubai, lacking any collateral. Sun's statement underscores the stark discrepancy in user asset management, raising significant concerns within the cryptocurrency community.

Sun further claims that FDT's allocations were merely for personal enrichment, unlike FTX's investments in companies such as Robinhood and AI startup Anthropic. He expressed concern that FDT's CEO, Vincent Chok Zhuo, has shown no urgency to address these allegations. Sun criticized Chok's actions, stating that he has acted deceptively and maliciously, pretending nothing happened when exposed. This negligence in leadership at FDT is starkly contrasted with the actions taken by the now-convicted founder of FTX, Sam Bankman-Fried.

Given the gravity of the allegations, Sun is urging Hong Kong authorities to take decisive action against FDT. He compares the situation to the regulatory response seen during the FTX fallout, stressing the necessity for immediate action to safeguard Hong Kong’s integrity as a leading financial hub. Sun remarked during public statements that Hong Kong must act swiftly, decisively, and effectively, similar to its US counterparts.

To aid authorities and promote transparency, Sun has initiated a $50 million bounty program aimed at uncovering information about FDT’s alleged fraudulent activities. He has also engaged in discussions with lawmaker Johnny Wu about potential regulatory measures to prevent further violations. As the crypto landscape continues to evolve, Justin Sun’s claims against First Digital Trust depict a concerning scenario reminiscent of past financial mishandlings. With increasing scrutiny on regulatory frameworks, the actions taken by Hong Kong authorities in the coming weeks will be crucial to restoring confidence in the sector. Ensuring rigorous oversight can mitigate risks and protect investors from potential fraud.