On April 3, 2024, TRON Founder Justin Sun Revealed a Shocking Case of TUSD (TrueUSD) Fiat Reserve Misappropriation at a Press Conference, Involving Amounts as High as $456 Million, Directly Pointing to Collusion Between Hong Kong Licensed Trust Companies First Digital Trust Limited (FDT), Legacy Trust Company Limited, and a Private Company in Dubai, Utilizing Regulatory Loopholes to Misappropriate Client Funds. Justin Sun Emphasized That This Case Not Only Threatens Public Asset Security but Also Severely Damages the Reputation of Hong Kong as an International Financial Center, Calling for Global Cooperation to Crack Down on Financial Crimes.
Core of the Case: Licensed Institutions Become Money Laundering Middlemen
1️⃣ Abuse of Power
In December 2020, After Acquiring TUSD from TrueCoin LLC, Techteryx Commissioned the Latter to Coordinate International Operations and Select Financial Service Providers. TrueCoin Designated FDT as the Custodian of TUSD Reserves, Managing Over $500 Million in Funds, While Also Recommending Cayman Islands Fund Aria Commodity Finance Fund as the Primary Investment Channel.
2️⃣ Transnational Money Laundering Tactics
Before July 2023, TrueCoin Collaborated with FDT Executive Vincent Chok to Transfer $456 Million in Reserves to a Private Company in Dubai Through False Documents and Unauthorized Transfers, which was Actually Fully Owned by the Wife of a Cayman Fund Manager. This Action Seriously Violated Trust Obligations, Acting as 'Legitimate Institutions Covering Illegal Money Laundering.'
3️⃣ SEC Intervention and Charges
In September 2024, the SEC Publicly Charged TrueCoin with TUSD Fraud, Directly Pointing to its 'Fabricated Investment Security' Misleading Investors, and Continued Unlawful Profit After the Acquisition of Techteryx, Exposing Public Funds to High Risks.
Justin Sun's Emergency Rescue: Personally Funding to Stabilize TUSD Liquidity
In 2023, FDT Was Investigated by Techteryx for Failing to Pay Investment Interest, Revealing Huge Amounts of Misappropriated Funds. Techteryx Immediately Sought Help from Justin Sun, Who Infused Personal Funds to Ensure Adequate TUSD Reserves and Avoid a Run Crisis. Justin Sun Stated:
These Are Public Assets, and Protecting the Interests of Holders is My Responsibility. But the Scale of This Case Exposes Serious Regulatory Failures in Hong Kong, Which Must Undergo Thorough Reform!
Call for Addressing Regulatory Loopholes and Global Cooperation
1️⃣ Trust Crisis in Hong Kong's Trust Industry
FDT, as a licensed institution, was able to Misappropriate Funds at Will, Reflecting Insufficient Scrutiny of 'Beneficial Owners' in Current Regulations, and Difficulty in Investigating Cross-Jurisdictional Crimes. Justin Sun Criticizes:
Fraudsters Should No Longer Use Licensed Status to Harm Society! Hong Kong Must Plug the Loopholes, or it Will Undermine Its International Financial Standing.
2️⃣ Challenges from Transnational Criminal Networks
This Case Involves Multiple Shell Companies in Hong Kong, Cayman, and Dubai, Highlighting the Need for Global Intelligence Sharing and Judicial Cooperation to Combat Financial Crimes. Justin Sun Urges:
Only with International Cooperation can we Cut Off Such Sophisticated Money Laundering Chains.
Industry Reflection: Stablecoin Regulation is Urgent
TUSD is One of the Top Ten Dollar Stablecoins by Market Capitalization, and This Case Again Raises Questions About 'Fiat Reserve Transparency.' Industry Insiders Point Out:
Audit Mechanism Failure: TrueCoin Long Manipulated Fund Flows Without Being Exposed by Third-Party Audits.
Moral Hazard of Licensed Institutions: FDT Abused Customer Trust, Reflecting the Self-Regulatory Mechanism of the Trust Industry as Essentially Nonexistent.
Justin Sun Emphasizes that He Will Continue to Promote 'On-Chain Reserve Instant Verification' Technology and Support Legislative Requirements in Various Countries for Stablecoin Issuers to Ensure '100% Reserve Transparency.'
#FinancialSecurity #StablecoinRisk #TransnationalMoneyLaundering
Forward Reminder: Be Sure to Verify Project Compliance Before Investing! 🔄
