Tron founder Justin Sun has made allegations against Hong Kong-based financial institution First Digital Trust (FDT) regarding serious financial misconduct, drawing attention to the stablecoin FDUSD.
Sun's Insolvency Allegations Against FDT
FDUSD, a stablecoin from First Digital Trust, recently fell below its $1 peg, raising concerns about its reserves. Justin Sun claims that FDT, which manages these reserves, is insolvent. He urged users to secure their funds. Sun also publicly shared a screenshot of FDT's financial statement revealing the company has had negative equity for three years.
FDT's Response to the Allegations
FDT denied Sun's claims, stating it is fully solvent and its assets are safe. The company called the accusations a 'smear campaign' and plans to take legal action to protect its reputation.
Critique of Hong Kong's Financial Laws
Sun further criticized that despite FDT's financial situation, the company continues to raise billions in public markets. He remarked that 'FDT's very existence at this very moment is a mockery of the rule of law in Hong Kong' and harshly criticized the region's financial regulations.
Justin Sun's accusations against First Digital Trust raise important questions about financial transparency and regulatory mechanisms in Hong Kong, which could have serious implications for the market.
