Is First Digital Trust in Crisis? Justin Sun Exposes $100M Deficit

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Tron founder Justin Sun has publicly accused First Digital Trust (FDT), a Hong Kong-based financial institution, of severe financial misconduct.

FDUSD, a stablecoin from Hong Kong’s First Digital, recently dropped below its $1 peg due to concerns over its reserves, falling to $0.87 against USDT and $0.76 against USDC, before it stabilised around $0.98–$0.96.

Sun Claims FDT Is Financially Insolvent

FDUSD’s price fell after reports that TrueUSD’s reserves were stuck in illiquid assets. Justin Sun claimed First Digital Trust (FDT), which manages these reserves, is insolvent and urged users to secure their funds. FDT denied the claims, saying it’s fully solvent and its assets are safe. They also called Sun’s accusations a “smear campaign” and plan to take legal action to defend their reputation. 

In a latest X post, Justin Sun shares a screenshot of First Digital Trust’s financial statement, revealing the company has had negative equity for three years.

Sun claims that FDT is financially insolvent, with its liabilities exceeding its assets for three consecutive years, ending 2024 with a negative HK$100 million. To make matters worse, the company is reportedly tied to significant losses from the alleged misappropriation of user assets.

Is It A Mockery Of Law?

He highlighted that despite this, FDT has allegedly misappropriated user assets and is still raising billions in public funds. “FDT’s very existence at this very moment is a mockery of the rule of law in Hong Kong,” Sun remarked.

Sun also went public with his accusations, live-streaming a statement where he claimed to uncover a major international financial fraud involving both traditional finance and Web3 platforms. He criticized Hong Kong’s financial regulations, saying loopholes allowed the fraud to happen.

He also questioned how Hong Kong regulators and law enforcement could allow this situation to persist, suggesting that it undermines the rule of law in the region.