Andrew Grant
Key Takeaways
- Justin Sun said First Digital Trust is insolvent and called on users to withdraw funds and regulators to intervene.
- The warning came hours after filings revealed Sun bailed out TUSD when $456M in reserves were frozen in unauthorized investments.
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Justin Sun issued a public warning earlier today, declaring that Hong Kong-based First Digital Trust (FDT) is insolvent and unable to fulfill redemptions.
Protect users and protect HK
First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets. There are significant loopholes in both the trust licensing process in…
— H.E. Justin Sun 🍌 (@justinsuntron) April 2, 2025
In a post on X, the Tron founder urged users to immediately secure their assets and called on Hong Kong regulators and law enforcement to act swiftly to prevent further damage.
“First Digital Trust is effectively insolvent and unable to fulfill client fund redemptions,” Sun posted. “I strongly recommend that users take immediate action to secure their assets.”
He added that Hong Kong’s reputation as a global financial center is at risk due to weak trust licensing and risk management oversight.
The post came just hours after court filings surfaced showing Sun had previously bailed out Techteryx’s TrueUSD (TUSD) stablecoin, injecting emergency liquidity after $456 million in reserves became stuck in illiquid investments.
The reserves had been diverted from their intended destination—Aria Commodity Finance Fund (Aria CFF)—into a separate Dubai-based entity, Aria Commodities DMCC, without authorization, according to filings submitted by US law firm Cahill Gordon & Reindel.
At the time, First Digital Trust served as the fiduciary manager of TUSD’s reserves and allegedly facilitated the transfer.
Plaintiffs in the case described the transactions as misappropriation and misrepresentation. FDT’s CEO, Vincent Chok, denied any wrongdoing, saying his firm acted on Techteryx’s instructions and raised concerns over KYC issues linked to the stablecoin issuer.
According to Zoomer Fied on X, the fallout from Sun’s post was immediate. FDUSD, a stablecoin issued by First Digital, dropped 5% from its peg, erasing approximately $130 million in market cap.
Although at press time, FDUSD had recovered to $0.98, it remained below its $1 peg, raising concerns about potential further drawdown and stability risks.
Sun’s warning has intensified pressure on Hong Kong regulators to respond. He is scheduled to hold a press conference on X on April 3, to address the matter further.
First Digital Trust denied Justin Sun’s insolvency claims, stating the dispute concerns TUSD, not FDUSD. The company asserted that FDUSD remains fully solvent and backed 1:1 by US Treasury Bills, with reserves transparently listed in its attestation reports.
“Every dollar backing FDUSD is secure, safe, and accounted for,” a spokesperson said, dismissing Sun’s post as a coordinated smear campaign targeting a competitor.
First Digital added that it intends to pursue legal action to protect its reputation. The firm plans to hold an AMA on X Spaces on Thursday, April 3, at 4pm Hong Kong time to address the matter publicly.
This article was updated to include a response from First Digital Trust.
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