Justin Sun Accuses First Digital Trust of $500M Misappropriation, Prompting FDUSD Depeg and TUSD Bailout

Justin Sun, founder of the Tron blockchain, has accused First Digital Trust (FDT) of misappropriating $500 million in client reserve funds, leading to a significant depeg of the stablecoin FDUSD. Sun claims that FDT, which manages the reserves for both TrueUSD (TUSD) and FDUSD, is insolvent and unable to process client redemptions. This situation prompted Sun to quietly bail out TUSD after $456 million in reserves became illiquid due to the actions of Aria Capital Mgt and Aria Commodity Finance Fund, managed by Matthew Brittain and his spouse Cecilia Brittain respectively. Following Sun's allegations, FDUSD experienced a depeg, dropping to as low as $0.89 before recovering to $0.987. Sun has called for changes to Hong Kong's laws around trusts, citing systemic loopholes that allowed the alleged fraud to occur. He urged Hong Kong regulators to take decisive action to safeguard the city's financial reputation. To continue reading this as well as other DeFi and Web3 news, visit us at thedefiant.io