Justin Sun Accuses Hong Kong Custodian of Major Fund Misuse
Tron founder Justin Sun has sparked controversy by accusing First Digital Trust (FDT), a Hong Kong-based crypto custodian, of mishandling client funds on a massive scale.
According to Sun, the situation is even more severe than the collapse of FTX. He alleges that FDT’s leadership engaged in unauthorized fund transfers and offshore financial misconduct, including money laundering, potentially damaging investor confidence far beyond the crypto sector.
Sun claims that FDT improperly withdrew $456 million from TrueUSD (TUSD) custodial reserves and transferred the money to a dubious Dubai-based entity without legal justification.
He also implicated FDT’s CEO, Vincent Chok, suggesting direct involvement in these questionable transactions. To aid in recovering the funds, Sun has offered a $50 million reward, urging Hong Kong authorities to take immediate action.
The fallout is already evident as the FDUSD stablecoin briefly lost its dollar peg, raising concerns among traders. Sun believes that Hong Kong’s response will be crucial in maintaining its credibility as a crypto hub, comparing the situation to how the United States managed the FTX crisis.
In contrast, FDT has categorically denied Sun’s allegations, dismissing them as a deliberate attack on its reputation. The company insists it remains financially sound and plans to take legal measures to counter Sun’s statements. Despite the controversy, FDUSD has largely maintained its value, staying just above $0.99.
How Hong Kong handles this dispute could influence its global standing in the crypto world, as the potential scandal draws increasing attention from the broader financial community.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
