- Justin Sun has accused First Digital Trust of mishandling $456 million in client funds, calling it worse than the FTX scandal.
- The company denies the allegations, but the controversy threatens Hong Kong’s financial credibility and stability in the crypto sector.
In a bold accusation that has shaken the cryptocurrency world, Tron founder Justin Sun claims that the First Digital Trust (FDT), a Hong Kong-based custodian, has mishandled $456 million in client funds—alleging that the situation is even worse than the infamous FTX scandal.
Sun’s allegations are nothing short of explosive. He accuses FDT of making unauthorized transfers from TrueUSD (TUSD) custodial reserves, sending the funds to a Dubai-based company that he believes was involved in money laundering. With no permission from clients or legal justification, Sun argues that FDT’s leadership, including CEO Vincent Chok, is directly responsible for the mishandling of funds.
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“If these allegations are proven true, this could shake the trust in not just FDT but in the broader Hong Kong financial sector,” Sun said in a recent post. His remarks highlight a growing concern over financial oversight in crypto hubs like Hong Kong, which could see its credibility tarnished if this case escalates.
The impact of these accusations is already being felt in the crypto markets. The FDUSD stablecoin, tied to FDT, briefly lost its peg to the US dollar, sparking fears of instability. Investors are understandably anxious, and Sun has stepped up with a bold move: he’s offering a $50 million bounty to track down the missing funds and help restore investor confidence.
As the controversy unfolds, Hong Kong lawmakers have expressed concern, with one promising legal action if Sun’s claims are verified. This could escalate into a full-blown political and legal crisis, potentially damaging Hong Kong’s role in the global cryptocurrency landscape.
Despite the accusations, FDT has strongly denied any wrongdoing, dismissing the claims as part of a smear campaign. The company insists it remains financially sound and will fight any legal battles head-on.
While FDUSD has managed to stay above $0.99 in value so far, the damage to trust could be lasting. The crypto community will be closely watching how Hong Kong handles this potential scandal, as it could determine the future of crypto regulations in the region.
With all eyes on Hong Kong, Justin Sun’s claims could mark the beginning of another major crypto scandal—one that might eclipse FTX if the allegations prove true.
