Justin Sun, the founder of TRON, has intensified his accusations against First Digital Trust (FDT), a custodian based in Hong Kong, claiming that FDT was involved in a $500 million embezzlement scheme. The controversy centers around allegations that FDT diverted funds intended for a mutual fund investment to an unauthorized company based in Dubai.
The Allegations
In a detailed post on X (formerly Twitter), Sun accused FDT of orchestrating a fraudulent scheme in which $456 million, meant for investment in the Cayman Islands-based Aria Commodity Finance Fund (ACFF), was illegally transferred to Aria DMCC, a Dubai-based company. Sun likened the act to an “address replacement attack,” a term commonly associated with blockchain hacks where small changes in addresses can lead to major thefts. He stressed that, although the names of the involved entities sounded similar, they were entirely different, similar to how slight differences in blockchain addresses can lead to a completely different outcome.
Involvement of Key Individuals
Sun further implicated several individuals, including Alex De Lorraine, FDT CEO Vincent Chok, and Yai Sukonthabhund, in the alleged conspiracy. He claims that these individuals were involved in a scheme that allowed them to siphon tens of millions of dollars in kickbacks. Sun also accused Chok of personally orchestrating a transfer of at least $15.5 million in secret kickbacks to a Hong Kong-based account called Glass Door, further adding fuel to the allegations.
FDT’s Response
In response to these serious accusations, First Digital Trust has filed a defamation lawsuit against Sun in Hong Kong’s High Court. The custodian company is seeking an injunction to prevent Sun from repeating the allegations, which they have denied, calling them false and damaging to their reputation. FDT also claimed that it remains financially solvent and capable of meeting its obligations.
Market Impact
The allegations have had tangible effects on the market, particularly on FDUSD, the stablecoin issued by First Digital Trust. Following Sun’s accusations of insolvency, FDUSD briefly lost its peg to the US dollar but has since recovered, trading at $0.9987 at the time of writing.
The situation is ongoing, with Sun’s bounty program aimed at recovering TUSD reserves being another development in the controversy. As the legal proceedings unfold, both sides are preparing for a long battle over these serious claims.
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