TRON Founder Exposes FDT’s “Seven Sins”, Allegations Of Misconduct, Fraud, & Regulatory Breaches

Justin Sun, the founder of TRON, recently revealed First Digital Trust’s grave wrongdoing on X (Twitter). He outlined seven major sins committed by the crypto custodian FDT. 

Sun stated that FDT is not only insolvent but also involved in multiple illegal actions. He urged everyone to act quickly before further harm occurs. Sun claims he has seen strong evidence that FDT misappropriated TUSD reserves worth over $501.85 million. 

Fiduciary Breach and Misuse of Funds

His statement prompted a strong reaction from the cryptocurrency community. Sun further announced a bounty program worth $50 million to recover the misappropriated funds.

TRON founder Sun highlighted that FDT breached its fiduciary duty under Hong Kong law. He explained that trustees must act with loyalty, care, and diligence as mandated by the Trustee Ordinance. 

Sun asserted that misusing client money breaches those statutory duties. The firm diverted TUSD reserves to ARIA DMCC without proper authorization, violating client money rules. He stressed that such diversion is a serious offense under Hong Kong law. 

The misdirection of funds creates risks of civil liability and criminal penalties. Sun warned that FDT could face hefty fines and potential prison terms.

Unlicensed Investment and Fraudulent Activities

Sun also accused FDT of engaging in unlicensed investment activities. He noted that FDT is registered as a TCSP company but lacks a proper SFC license. This activity violates the Securities and Futures Ordinance rules in Hong Kong. 

He emphasized that misappropriating funds with deception constitutes both fraud and theft. Sun detailed that FDT worked with partners like Aria CFF, Truecoin, and Crossbridge/Finaport. 

Their joint actions conceal the theft and deceive clients with falsified records. The scheme can lead to severe criminal charges and long prison terms.

Also Read: Tron’s Justin Sun Anticipates Influx of New Users, Stablecoin Growth, and Legal Wins for TRX

False Reporting, AML Failures, and Bribery Issues

TRON founder Sun further charged FDT with false reporting and document concealment. He mentioned that the firm provided fabricated statements to hide unauthorized transactions.

Sun indicated that such misrepresentation is against the Securities and Futures Ordinance. 

He also accused FDT of breaching anti-money laundering standards by moving funds through complex transactions. These actions violate AML regulations and obscure the funds’ true origin. 

Additionally, Sun claimed FDT accepted secret kickbacks under the Prevention of Bribery Ordinance. This practice not only breaks regulatory rules but also fosters corruption within the financial system.

New Bounty Program and Community Impact

Sun announced a groundbreaking bounty program to recover the misappropriated TUSD funds. The $50 million reward targets criminals responsible for the fund diversion.

He urged investigators and whistleblowers to come forward with vital information. The bounty program aims to disrupt criminal activity in the crypto space and restore trust among investors. 

Sun’s initiative underscores the commitment of TRON to protect digital asset holders. His bold stance resonates with those who seek transparency and accountability in the market.

TRON’s Justin Sun decisively exposed FDT’s misconduct and launched a bounty program to pursue stolen assets. His actions reflect growing concerns over irresponsible behavior in the crypto custody industry. 

The case highlights the importance of strict regulatory compliance and thorough oversight. Investors and regulators now face pressure to address similar wrongdoings swiftly.

Also Read: Tron Co-Founder Justin Sun Reflects on Tough Decision to Save TUSD, Absorbing $500M Risk