Justin Sun Blasts First Digital Trust: “Worse Than FTX” in $500M Fraud Scandal
Justin Sun claims First Digital Trust embezzled $500M in client funds, calling the scandal “ten times worse” than FTX. A $50M bounty has been launched to uncover proof of misconduct.
TRON founder Justin Sun is once again making headlines as he escalates his accusations against First Digital Trust (FDT), the issuer behind the FDUSD stablecoin. In a fiery April 5 post on X, Sun didn’t mince words, branding FDT’s actions as “ten times worse” than the infamous FTX collapse and calling for urgent regulatory intervention.
Sun alleges that FDT embezzled approximately $500 million from custodial reserves meant to back stablecoins like TUSD, comparing the act to outright theft. While FTX—now defunct following its shocking 2022 bankruptcy—operated on what he described as a “pledge-based system” using collateralized loans with native tokens like FTT and SRM, Sun claims FDT didn’t even attempt such a structure.
“FDT simply siphoned off $456 million from TUSD’s custodial funds without client authorization or knowledge and booked it as loans to a dubious third-party Dubai company,” Sun wrote.
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Unlike FTX, which misused funds but invested them in high-profile ventures like Robinhood and Anthropic, Sun accuses FDT of funneling assets into shadowy private enterprises for personal gain, with zero transparency or user consent.
Sun’s criticism focused heavily on FDT’s CEO, Vincent Chok Zhuo. He accused Chok of maintaining a posture of denial and failing to address the allegations responsibly—highlighting a stark contrast with Sam Bankman-Fried (SBF), who, despite his eventual conviction, attempted to retrieve user funds and engaged regulators after FTX’s collapse.
“Vincent Chok has acted deceptively and maliciously, pretending nothing happened when exposed,” Sun declared.
Sun believes this scandal not only jeopardizes investor trust but also risks tarnishing Hong Kong’s standing as a global financial center. He urged Hong Kong authorities to match the swift and decisive response shown by U.S. regulators during the FTX fallout.
“Hong Kong must act like its U.S. counterparts—swiftly, decisively, and effectively. We cannot allow these fraudsters to continue their pyramid scheme against the public,” he warned.
To further the cause, Sun has launched a $50 million bounty campaign, encouraging whistleblowers and investigators to help uncover hard evidence of the misconduct. He also held talks with Hong Kong lawmaker Johnny Wu, exploring legislative and regulatory pathways to address the alleged wrongdoing.
This incident adds more turbulence to the crypto regulatory landscape and intensifies scrutiny of stablecoin custodians and the murky underbelly of centralized asset management within decentralized ecosystems.
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