Tron founder Warns of First Digital Trust Insolvency
Justin Sun, the founder of Tron, has revealed that First Digital Trust (FDT), a Hong Kong-based fiduciary, is insolvent. In a recent X post, Sun urged users to secure their assets instantly.He also called for regulatory intervention to stop financial fraud in the region.
Legal documents show that nearly $456 million of TrueUSD stablecoin reserves became illiquid due to unauthorized investments. Techteryx, the issuer of TUSD, had entrusted FDT with managing these reserves. However, the funds were allegedly diverted into an unauthorized Dubai-based entity, Aria Commodities DMCC.
Sun provided emergency funding to Techteryx, as reported by CoinDesk. He emphasized the risk to hong Kong’s financial integrity, stating, “There are meaningful loopholes in both the trust licensing process in Hong Kong and the internal risk management of its financial system.”
Legal fallout is mounting. techteryx’s filings accuse FDT of misappropriation and fraudulent misrepresentation. FDT CEO Vincent Chok denies any wrongdoing, claiming the firm followed instructions.
This controversy follows broader issues with TUSD, including the collapse of banking partner Prime Trust and a 2024 SEC settlement over misleading investors about the stablecoin’s reserves.
