Tron Founder Drops Bombshell: First Digital Trust Crisis May Eclipse FTX Collapse!

Tron blockchain founder Justin Sun has made serious allegations against First Digital Trust (FDT), claiming that its situation may be even more alarming than the infamous FTX collapse. Sun drew parallels between FDT’s conduct and that of the now-defunct crypto exchange FTX, stating that both cases are examples of large-scale fraud. However, he emphasized that FDT’s actions are “significantly worse” due to the nature of the alleged fund mismanagement.

The $456 Million Controversy

Sun’s comments come after reports that FDT made an unauthorized transfer of $456 million from TUSD’s custodial funds. He said this massive sum was moved without client consent or knowledge. Unlike FTX’s approach, where founder Sam Bankman-Fried allegedly backed misused funds with overvalued assets like FTT and SRM tokens, Sun claims FDT did not attempt to secure or legitimize the transaction. He alleges the funds were channeled to a questionable third-party company in Dubai with no collateral or proper documentation.

FDUSD Depeg and Market Impact

Following the controversy, the stablecoin FDUSD temporarily depegged, raising concerns among investors and regulators. Although its value has remained above $0.99 since April 2, the brief fluctuation has unsettled the market. In response, Justin Sun announced a $50 million bounty for anyone who can help recover the missing TUSD reserves. His bold move has drawn public and political attention, including that of a Hong Kong lawmaker who pledged enforcement action if the allegations are proven true.

FDT Denies All Allegations

First Digital Trust, however, has strongly denied all of Sun’s allegations. In its latest statement, FDT called the claims spurious and defamatory and meant only to tarnish its reputation as well as the FDUSD stablecoin. The firm reiterated that it is not insolvent and threatened to sue to clear its reputation. FDT is confident that its firm is in good shape, notwithstanding the scathing attack.

A Threat to Hong Kong’s Financial Reputation?

In a recent social media post, Sun further suggested that the situation could have far-reaching implications for Hong Kong’s financial credibility. He argued that just as U.S. regulators swiftly acted against FTX, Hong Kong must take decisive action to preserve its standing as a trusted global financial hub. Sun’s comments suggest that inaction could lead to long-term damage to the region’s regulatory image.

The Call for Swift Justice

Sun also contrasted the actions of FDT’s CEO Vincent Chok with those of FTX’s Sam Bankman-Fried. While SBF has been arrested and convicted of financial crimes, Sun accuses Chok of using stolen money to buy personal indulgences, adding to the seriousness of the charges. He emphasized the need for transparency, accountability, and swift action to maintain trust in the crypto space.