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Tron founder Justin Sun has initiated a legal process against First Digital Trust, the issuer behind the FDUSD stablecoin, accusing it of embezzling nearly $500 million in client funds.
On a Apr. 3 post in X, Sun said he had met with Hong Kong lawmaker Johnny Wu to report the case and submitted related materials to local regulators and judicial authorities. The alleged embezzlement centers on FDT’s handling of client assets, which Sun claims have been misappropriated.
I met with Hong Kong Legislative Council member Johnny Wu and reported the embezzlement case involving nearly $500 million of client reserve funds by First Digital Trust (FDT). We have submitted relevant materials to the regulatory and judicial authorities. We are fully confident… https://t.co/GJe4jnwKBt
— H.E. Justin Sun 🍌 (@justinsuntron) April 3, 2025
Sun described the incident as “a major international financial fraud involving traditional financial institutions and web3 platforms,” and said it was time to expose how “loopholes in the trust industry” are being exploited.
On the same day, Sun hosted a live podcast to further expose what he called serious irregularities, warning that FDT was effectively insolvent and still operating under the cover of a public trust.
Johnny Wu publicly addressed the case, confirming that he met with the complainants and raised the issue in the Legislative Council. “If the allegations are true, enforcement authorities will definitely take action,” he said. Ng emphasized Hong Kong’s strong legal system, stating, “International investors should not worry about a single incident.”
根據傳媒報道，今天有Web3企業申訴表示在港懷疑被信託公司非法轉移5億美元資產，我也在立法會回應了事件，並會見當時人申訴。不少行業朋友和傳媒向我查詢事件看法，我有以下幾點回應 :
— Johnny Ng 吴杰庄 (@Johnny_nkc) April 3, 2025
1.… pic.twitter.com/Qm29sfsV1f
Sun’s accusations, which began on Apr. 2, had briefly caused First Digital USD (FDUSD) to lose its dollar peg and drop as low as $0.87. The stablecoin has since stabilized, trading at $0.99 as at press time. In response to Sun, FDT denied all claims and said FDUSD remains fully backed 1:1 by cash and U.S. Treasury bills.
FDT dismissed Sun’s claims as “false information” and a “smear campaign.” The company warned it would take legal action to defend its name and accused Sun of spreading false information. Binance, which holds most of the FDUSD supply, confirmed the stablecoin’s 1:1 backing in an update. Its latest attestation showed $2.05 billion in reserves as of Mar. 1.