Justin Sun Reveals Nearly $500 Million Trust Fund Theft, Calls for Strengthened Regulations to Protect Public Interests

On April 3, Tron Foundation founder Justin Sun revealed a major financial fraud case involving the misappropriation of the TrueUSD (TUSD) fiat reserve. In this case, various financial institutions including Hong Kong licensed trust companies First Digital Trust Limited (FDT) and Legacy Trust Company Limited (Legacy Trust), as well as a private company in Dubai, colluded in fraudulent activities to embezzle $456 million of customer funds. Sun, while providing funding support for all parties involved in TUSD through Techteryx, highlighted that this case not only threatens public interest but also exposes a serious flaw in the trust industry, jeopardizing Hong Kong's reputation as a global financial center.

According to information disclosed during the press conference, in December 2020, Techteryx acquired TUSD from TrueCoin LLC (TrueCoin). TrueCoin was retained and entrusted to select financial service providers and coordinate international operations, with the arrangement scheduled to terminate in July 2023. During this period, TrueCoin, in its fiduciary role, selected FDT as the custodian of TUSD's fiat reserve assets, managing over $500 million in reserve funds. Furthermore, TrueCoin also recommended the Aria Commodity Finance Fund (the "Cayman Fund") to Techteryx as a primary investment.

In subsequent transactions, TrueCoin was suspected of colluding with FDT and other institutions to transfer $456 million of TUSD's fiat reserve through false documents and unauthorized transfers to a private company in Dubai fully owned by the wife of a former investment manager of the aforementioned Cayman Fund. Vincent Chok, the CEO and Director of FDT and Legacy Trust, directly approved these illicit transactions, thus seriously breaching their fiduciary duties.

In 2023, as FDT failed to pay interest on certain investments conducted on behalf of Techteryx, Techteryx appointed an independent professional team to conduct a comprehensive investigation into FDT. The team discovered a significant amount of client funds under custody had been misappropriated and sought support from Justin Sun. Using his personal funds, Justin Sun provided assistance to Techteryx, ensuring that TUSD had sufficient liquidity to safeguard the interests of all TUSD holders.

It has been reported that as early as September 2024, the U.S. Securities and Exchange Commission (SEC) issued a public statement accusing TrueCoin of engaging in fraudulent activities involving TUSD. These fraudulent activities occurred after the Techteryx acquisition, while TrueCoin was still operating as the issuer of TUSD. The SEC believes that "TrueCoin, through false statements about the security of the investment, sought to profit for itself, while exposing investors to significant undisclosed risks".

Justin Sun stated, "These assets are public funds, and to protect the public interest and maintain Hong Kong's reputation as an international financial center, I have decided to provide liquidity support. I am shocked by the scale of this fraud and feel a great sense of responsibility."

Justin Sun called on Hong Kong regulators to take decisive action, plug loopholes, and prevent further loss of public funds. The reason he chose to publicly address this issue and expose the fraudulent behavior is to see all fraudsters held accountable under the full force of the law. "They should never again have the opportunity to defraud the public in Hong Kong or elsewhere under the guise of licensed institutions."

In this case, the ability of licensed institutions like FDT to arbitrarily misappropriate public funds highlights regulatory deficiencies, while the complex transnational crime network underscores the necessity of global cooperation to combat financial fraud. Justin Sun stated, "As a member of the industry, I choose to reveal the truth and assist TUSD to protect the public and promote the healthy development of the industry. Fraudsters must face legal punishment."

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