On April 3rd, TRON founder Justin Sun exposed a major financial fraud case involving the theft of TUSD (TrueUSD) fiat currency reserves at a press conference. In this case, financial institutions including Hong Kong licensed trust companies First Digital Trust Limited (FDT), Legacy Trust Company Limited (Legacy Trust), and a private company in Dubai, collectively misappropriated $456 million in customer funds through fraudulent actions. Justin Sun stated that while providing funding support for TUSD's owner Techteryx, he noticed that this case not only threatens public interests but also exposes serious vulnerabilities in the trust industry and damages Hong Kong's reputation as a global financial center.
According to the press conference disclosure, after Techteryx acquired TUSD from TrueCoin LLC in December 2020, TrueCoin was retained and entrusted to select financial service providers and coordinate international operations, an arrangement that terminated in July 2023. During this period, TrueCoin used its fiduciary role to select FDT as the custodian of TUSD's legal reserve assets, managing over $500 million in reserve funds. TrueCoin also recommended the Aria Commodity Finance Fund ("Cayman Fund") to Techteryx as the primary investment.
In subsequent transactions, TrueCoin was allegedly colluding with FDT and other institutions, transferring $456 million in TUSD legal reserve funds to a private company in Dubai fully owned by the wife of the Cayman Fund's investment manager through false documents and unauthorized transfers. FDT and Legacy Trust's CEO and Director Vincent Chok directly approved these illegal transactions, seriously violating fiduciary duties.
In 2023, because FDT failed to pay interest on certain investments made on behalf of Techteryx, Techteryx dispatched an independent professional team to conduct a comprehensive investigation into FDT, discovering massive misappropriation of entrusted customer funds, and sought support from Justin Sun. Justin Sun provided assistance with his personal funds to Techteryx, ensuring TUSD had sufficient liquidity and protecting 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 fraudulent activities involving TUSD. These fraudulent activities occurred after Techteryx's acquisition while TrueCoin was still operating TUSD. The SEC believes that "TrueCoin profited by making false statements about investment safety while exposing investors to massive, undisclosed risks".
Justin Sun stated, "These are public funds. To protect public interests and maintain Hong Kong's reputation as an international financial center, I decided to provide liquidity support. I am shocked by the scale of this fraud and feel a great sense of responsibility".
Justin Sun called for Hong Kong regulatory authorities to take decisive measures to plug loopholes and prevent further loss of public funds. He chose to publicly disclose this issue and expose the fraud, hoping to see all fraudsters held accountable under the full force of the law, "They should never again have the opportunity to defraud the public under the name of licensed institutions in Hong Kong or elsewhere".
In this case, licensed institutions like FDT being able to arbitrarily steal public funds indicates regulatory deficiencies, and the complex cross-jurisdictional criminal network highlights the necessity of global collaboration in combating financial fraud. Justin Sun said, "As an industry member, I choose to reveal the truth and assist TUSD to protect the public and promote healthy industry development. Fraudsters must be severely punished by law".
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