Tron's Justin Sun Blows Whistle on First Digital Trust's Insolvency: "Protect Users and Protect HK!"

Millions in TrueUSD Reserves Mismanaged, Prompting Legal Action and Regulatory Calls

Hong Kong's financial scene is rocked as Tron founder Justin Sun drops a bombshell: First Digital Trust (FDT), a local fiduciary, is flat broke and can't cough up client funds. Sun's not holding back, blasting the news on X and urging users to scramble and secure their assets before it's too late.

In a fiery post, Sun isn't just sounding the alarm; he's demanding regulators step up and slam the brakes on what he calls a financial fraud fest in the region. He's not messing around, folks.

The drama unfolds as legal docs spill the beans: a whopping $456 million in TrueUSD stablecoin reserves went poof, thanks to some shady, unauthorized investments. Talk about a financial fiasco!

Techteryx, the brains behind TUSD, handed over their reserve management to FDT, but guess what? The filings claim FDT played fast and loose, funneling the cash into the Aria Commodity Finance Fund in the Cayman Islands. But wait, it gets worse—the money allegedly took a detour to an unauthorized Dubai outfit, Aria Commodities DMCC. Sun stepped in with emergency cash to keep Techteryx afloat, but the damage is done.

Sun's rallying cry? "Protect users and protect HK!" He's not mincing words about FDT's insolvency and the urgent need for users to take action. He's also shining a spotlight on the gaping holes in Hong Kong's trust licensing and financial risk management. "I urge regulators and law enforcement to take swift action," he demands.

It's clear as day: nearly $456 million in TrueUSD reserves were mismanaged, sparking legal fireworks and raising serious questions about stablecoin oversight. This isn't just a hiccup; it's a full-blown crisis.

Sun's not pulling punches, warning that Hong Kong's financial integrity is hanging by a thread. He's calling out the "significant loopholes" in the system and demanding immediate action from the powers that be.

Techteryx isn't staying silent either, pointing fingers at FDT for misappropriation and fraudulent misrepresentation. But FDT's CEO, Vincent Chok, is standing his ground, denying any wrongdoing and claiming they just followed orders.

This mess is just the latest in a string of TUSD headaches, following the collapse of former banking partner Prime Trust and a 2024 SEC settlement with TrueCoin and TrustToken over misleading investors about the stablecoin's reserves. It's a wild ride, and it's far from over.