Justin Sun Declares First Digital Trust Scandal 'Worse Than Expected Compared to FTX'

The founder of TRON, Justin Sun, is increasing accusations against First Digital Trust (FDT), the issuer of the stablecoin FDUSD, which he claims has embezzled 500 million USD of customer funds. In a post on April 5 on X, Sun compared FDT to the now-defunct FTX exchange, stating that the case of FDT is “ten times worse.” FTX filed for bankruptcy in November 2022 after a bank run revealed an $8 billion shortfall in the company’s assets. Justin Sun compares First Digital Trust with FTX Sun argued that although FTX misused users’ funds, the exchange at least maintained an internal system that described this activity as collateralized loans. He explained that FTX had used assets such as FTT tokens, SRM, and MAPS as collateral in transactions which on the surface had some structures. On the contrary, Sun stated that First Digital Trust had stolen funds without the consent of users or any internal collateral mechanism. Sun declared: “FDT simply withdrew 456 million USD from the TUSD escrow fund without the permission or knowledge of the customers, and recorded it as a loan to a questionable third-party company in Dubai without any collateral.” The founder of Tron further asserted that the founder of FTX, who has now been convicted, Sam Bankman-Fried (SBF), had indeed misused the funds. However, Sun noted that a large portion of that money had been invested in reputable companies such as Robinhood and the AI company Anthropic. On the other hand, Sun accused that FDT had transferred users’ assets to private entities for personal gain without any meaningful investment. Sun also targeted the CEO of FDT, Vincent Chok Zhuo, criticizing his clear indifference after the misconduct was exposed. According to him, Chok has no intention of taking responsibility. This is in contrast to SBF, which has taken actions to recover users’ assets and cooperate with the authorities. “Vincent Chok acted deceitfully and maliciously, pretending that nothing happened when caught,” Sun declared. Considering this development, the founder of TRON has urged the Hong Kong government to act swiftly. He called for a response similar to that of U.S. regulators in the collapse of FTX. Sun emphasized that Hong Kong’s reputation as a global financial center is under threat and called for the immediate enforcement of laws to prevent further damage. “Hong Kong must act like its U.S. partners—swiftly, decisively, and effectively. We cannot allow scammers to continue the pyramid scheme against the public,” the cryptocurrency entrepreneur concluded. To assist the investigation, Sun has launched a $50 million bounty program to expose the alleged misconduct. He has also met with Hong Kong lawmaker Johnny Wu to discuss potential regulatory actions.