Sun Yunlong Exposes Nearly $500 Million in Custodial Assets Embezzlement Including FDT, Calls for Strengthened Regulation to Protect Public Interests
On April 3, TRON founder Justin Sun revealed a major financial fraud case involving the misappropriation of TUSD (TrueUSD) fiat reserve funds during a press conference. In this case, various financial institutions, including Hong Kong licensed trust companies First Digital Trust Limited (FDT) and Legacy Trust Company Limited (Legacy Trust), as well as a private company in Dubai, colluded to embezzle $456 million of customer funds. Sun noted that while providing funding support to all parties involved in TUSD, his attention was drawn to how this case not only endangered public interests but also exposed serious flaws in the trust industry, undermining Hong Kong's reputation as a global financial center.
According to information disclosed during the press conference, in December 2020, Techteryx acquired TUSD from TrueCoin LLC (TrueCoin). TrueCoin was retained and entrusted to select financial service providers and coordinate international operations, with the arrangement set to terminate in July 2023. During this period, TrueCoin, in its capacity as a trustee, selected FDT as the custodian of the TUSD fiat reserve assets, managing over $500 million in reserve funds. Additionally, TrueCoin recommended the Aria Commodity Finance Fund (the "Cayman Fund") to Techteryx as a primary investment.
In subsequent transactions, TrueCoin was suspected of colluding with FDT and other institutions to transfer $456 million of TUSD fiat reserve funds to a private company in Dubai fully owned by the wife of a former investment manager of the aforementioned Cayman Fund through false documents and unauthorized transfers. FDT and Legacy Trust CEO and Director Vincent Chok directly approved these illicit transactions, grossly violating their fiduciary duties.
In 2023, due to FDT's failure to pay interest on certain investments made on behalf of Techteryx, Techteryx appointed an independent professional team to conduct a comprehensive investigation into FDT. The team discovered a substantial misappropriation of client funds under custody and sought support from Justin Sun. Sun personally provided support to Techteryx with his own funds to ensure that TUSD had sufficient liquidity, safeguarding the interests of all TUSD holders.
It is reported that as early as September 2024, the U.S. Securities and Exchange Commission (SEC) issued a public statement accusing TrueCoin of participating in fraudulent activities involving TUSD. These fraudulent activities occurred after Techteryx's acquisition and while TrueCoin still operated as the operator of TUSD. The SEC believes that "TrueCoin profited from misrepresentations of investment security while exposing investors to significant undisclosed risks."
Justin Sun stated, "These assets are public funds. To protect the public interest and maintain Hong Kong's reputation as an international financial center, I have decided to provide liquidity support. I am shocked by the scale of this fraud and feel a deep sense of responsibility."
Justin Sun called on Hong Kong regulators to take decisive actions to plug the loopholes and prevent further losses of public funds. His decision to publicly address this issue and expose the fraudulent behavior is aimed at seeing all scammers held accountable to the fullest extent of the law. "They should never again have the opportunity to defraud the public in Hong Kong or elsewhere under the guise of licensed institutions."
In this case, the fact that licensed institutions like FDT could freely misappropriate public funds indicates that there are still regulatory deficiencies. The intricate trans-jurisdictional crime network highlights the necessity of global collaboration to combat financial fraud. Justin Sun stated, "As a member of the industry, I choose to reveal the truth and assist TUSD to protect the public and promote the healthy development of the industry. Fraudsters must face severe legal consequences."
You may also like

The foundation of SpaceX's trillion-dollar valuation: Who is dividing Musk's annual capital expenditure of tens of billions?

France vs Senegal World Cup 2026: Mbappe’s New Era Begins Against a Historic Rival

SharpLink CEO: How to understand that Ethereum developers have just surpassed 1 million?

Morning Report | MiCA grace period expires on July 1; Kalshi's trading volume in the first week of the World Cup breaks $5.1 billion, setting a record

What is the connection between Huang Zheng of Pinduoduo and blockchain?

Morning Report | Prediction market platforms like Kalshi and Polymarket jointly sue Kentucky over 14.25% trading tax; Bridgewater founder discusses decision-making in the AI era: principled thinking should run parallel to AI, human insight remains irre...

If the AI bubble has already burst, who will truly remain?

Paul Graham: How to Make a Billion Dollars

After 18 years, blockchain has finally started to head towards the main channel

Claude enforces "facial recognition for household registration," starting in July, no ID card means no access?

On the day of SpaceX's IPO, the first real test of the three perpetual mechanisms

Value Distribution of Stablecoins

Galaxy Deep Dive: Is the Bitcoin Four-Year Cycle Still Valid?

SpaceX IPO, Nvidia, and Bitcoin: Why Traders Are Watching More Than Just Crypto in 2026

The other side of Musk's trillion-dollar fortune: 85% cannot be sold

The U.S. government prohibits foreigners from using Fable 5, Anthropic issues a rebuttal

Citibank releases "2030 Asset Tokenization Market Outlook": 6 major trends may create a $8.2 trillion market



