Tron founder Justin Sun reinforces his allegations against First Digital Trust (FDT)

Tron founder Justin Sun has stepped up charges against FDUSD stablecoin issuer First Digital Trust (FDT), claiming it misappropriated $500 million in customer funds.

In an April 5 post on X platform, Sun compared FDT to a bankrupt FTX exchange, saying the FDT incident was "ten times worse." FTX filed for bankruptcy in November 2022, and its balance sheet showed a $8 billion funding gap.

Justin Sun compares First Digital Trust with FTX

Sun believes that despite FTX abused user funds, it maintained at least an internal system that disguised the operation as a promised loan. He pointed out that FTX uses assets such as FTT, SRM and Map tokens as collateral in transactions, which have a certain structure. Instead, Sun claimed that FDT directly stole funds without the user's consent or any internal commitment mechanism.

"FDT deducted $456 million from TUSD's custodial funds without authorization or knowledge from the client and used it as a loan from a suspicious third-party Dubai company without any collateral," Sun said.

Sun further pointed out that the detained FTX founder Sam Bankman-Fried (SBF) did misappropriate funds, but most of the funds were invested in well-known companies such as Robinhood and artificial intelligence company Anthropic. Sun claims that FDT transfers user assets to private entities for personal interests without any meaningful investment.

Sun also criticized FDT CEO Vincent Chok Zhuo's indifference after the alleged misconduct was exposed, believing that Chok had no intention of taking responsibility, which is in stark contrast to the SBF taking measures to recover user assets and cooperate with the authorities.

"Vincent Chok's behavior was deceptive and malicious, pretending that things never happened," Sun said.

In view of the developments, Sun urged Hong Kong authorities to act quickly and called for a response similar to that of U.S. regulators during the FTX collapse. He stressed that Hong Kong's reputation as a global financial center is under threat and called for immediate action to prevent further damage.

Sun concluded: "Hong Kong must be as active, decisive and effective as its American counterparts - we cannot allow fraudsters to continue pyramid scams targeting the public."

To support the investigation, Sun launched a $50 million bounty program to expose the alleged violations. He also met with Hong Kong MP Johnny Wu to discuss possible regulatory actions.

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