Latest news with #TrueUSD
Yahoo
07-04-2025
- Business
- Yahoo
Is Justin Sun Taking A Page From Binance's Playbook? How FDUSD Attack Mirrors Binance-FTX Feud
Tron founder Justin Sun has launched an attack against First Digital Trust. Sun's tactics in the ongoing spat mirror elements of the feud between Binance and FTX. At the center of the dispute is a $456 million misappropriation claim. While FTX may have well been on its way to its demise, many believe the death blow was Binance founder Changpeng 'CZ' Zhao's public vote of no confidence on the rival exchange. He publicly outlined plans to sell off FTX's native token over concerns about its health, triggering a fatal run on the now-defunct platform. Now, Binance, or at least a firm with close ties to it, may be on the receiving end of a similar attack. Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Hasbro, MGM, and Skechers trust this AI marketing firm — . Throughout Wednesday and Thursday, Tron founder Justin Sun shouted to anyone who would listen that First Digital Trust was insolvent. First Digital Trust is the Hong Kong-based entity behind FDUSD, Binance's stablecoin of choice. 'First Digital Trust (FDT) is effectively insolvent and unable to fulfill client fund redemptions. I strongly recommend that users take immediate action to secure their assets,' Sun asserted in his first missive on Wednesday. Despite Sun's failure to provide evidence, his claims were enough to trigger a rush of redemptions that saw FDUSD briefly lose its peg and trade as low as $0.87 in a debacle that takes the mind back to the beef between Binance and FTX. 'Remember when CZ publicly accused FTX of insolvency and triggered a bank run on the exchange?' One crypto community member wrote, adding, 'Justin is trying to run the same playbook Insanely malicious especially if this accusation turns out to be false. The emperor has no clothes.' Trending: If there was a new fund backed by Jeff Bezos offering a ? Unlike the FTX saga, First Digital Trust appears to be holding steady. For now, the market appears to have been appeased by data showing the firm processing redemptions and an attestation of its reserves. Sun's attack against First Digital Trust appears linked to a recent legal filing in Hong Kong by Techteryx, the issuer of the TrueUSD stablecoin, against First Digital Trust. This filing was first reported by CoinDesk. In the legal filing, Techteryx accuses First Digital Trust, which it had appointed as a fiduciary to manage its reserve, of misappropriating $456 million of its funds and failing to pay up when it needed it. Techteryx claims this situation forced it to obtain a bailout from Sun. Techteryx has long been rumored to be owned by Sun, a claim both parties vehemently Digital Trust has denied the claims alleged in the legal filing while labeling the filing and Sun's actions as an attempt to deflect from Techteryx's failings. According to a statement by First Digital Trust, it never moved or invested any of Techteryx's funds without the latter's express permission. The firm contended that it was the TUSD issuer's decision to make illiquid investments. It also contended that redemption of these funds hinged on AML/KYC concerns over Techteryx's beneficial owner, which it said the firm has refused to reveal to date. 'We reiterate that FDT remains fully solvent, and every FDUSD is securely backed 1:1 by cash and cash equivalents. The exact ISIN numbers of all reserves backing FDUSD are clearly outlined in our attestation report, which is publicly available for verification. We are processing redemption requests as usual. We are seeking legal advice and FDT will pursue legal action to protect it's [sic] rights and reputation,' First Digital Trust said. Read Next: Can you guess how many retire with a $5,000,000 nest egg? . Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Up Next: Transform your trading with Benzinga Edge's one-of-a-kind market trade ideas and tools. Click now to access unique insights that can set you ahead in today's competitive market. Get the latest stock analysis from Benzinga? APPLE (AAPL): Free Stock Analysis Report TESLA (TSLA): Free Stock Analysis Report This article Is Justin Sun Taking A Page From Binance's Playbook? How FDUSD Attack Mirrors Binance-FTX Feud originally appeared on © 2025 Benzinga does not provide investment advice. All rights reserved. Sign in to access your portfolio
Yahoo
04-04-2025
- Business
- Yahoo
Tron's Justin Sun Bailed Out TUSD as Stablecoin's $456M Reserves Were Stuck in Limbo, Filings Show
Justin Sun bailed out Techteryx's TrueUSD stablecoin after nearly half a billion dollars of its reserves were rendered illiquid, people close to the matter confirmed, and the stablecoin issuer said in Hong Kong court documents. After acquiring TrueUSD from TrueCoin in December 2020, Techteryx appointed First Digital Trust (FDT), a Hong Kong-based fiduciary, to manage its stablecoin reserves. According to documents prepared by U.S. law firm Cahill Gordon & Reindel, FDT was instructed to invest the reserves in the Aria Commodity Finance Fund (Aria CFF), a Cayman Islands-registered vehicle. However, court filings allege that approximately $456 million was instead improperly diverted into Aria Commodities DMCC, a separate, unauthorized entity based in Dubai. Court documents identify Matthew Brittain as controlling Aria Commodity Finance Fund (Aria CFF) through Aria Capital Management Ltd and Cecilia Brittain as the sole shareholder of the separately owned Dubai-based entity Aria Commodities DMCC. However, emails from Aria's Matthew Brittan are signed with an address in Dubai. Court documents say that Cecilia is Matthew's wife. ARIA DMCC engages in trade finance, asset development, and commodity trading, while ARIA CFF finances commodity traders, including ARIA DMCC and third parties, according to Matthew Brittain, who described the relationship between the two companies in an email to CoinDesk. Attestations produced by Moore CPA Limited show, first published by Protos, that FDT managed $501 million of TrueUSD's reserves by November 2024. Hong Kong court filings also say Vincent Chok, First Digital's CEO, allegedly directed around $15.5 million in undisclosed commissions to an entity called "Glass Door" and separately structured approximately $456 million in unauthorized trade finance loans from FDT to Aria DMCC, later retroactively mischaracterizing them as legitimate fund investments in actions plaintiffs describe as fraudulent misrepresentation and misappropriation. "The remittances to Aria DMCC were blatant misappropriation and money-laundering," a statement of claim reads. "They were made without the knowledge, authorization or approval of the Plaintiff." These statements have not been tried in court as of press time. Aria DMCC invested funds in global projects that they described as relatively illiquid, such as manufacturing plants, mining operations, maritime vessels, port infrastructure, and renewable energy ventures. When Techteryx attempted to redeem its investments from Aria CFF between mid-2022 and early 2023 it received little or no funds back, with Aria entities allegedly defaulting on payments and failing to fulfill redemption requests, the court documents say. Techteryx then took full operational control of TUSD in July 2023, after TrueCoin terminated its involvement. As part of a transitional period following the December 2020 sale, TrueCoin continued running the day-to-day operations of TUSD. According to the complaint Cahill prepared for the U.S. DOJ, Sun stepped in around this time to provide emergency liquidity support, which was structured as a loan. The Techteryx team then quarantined 400 million TUSD so that retail redemptions could continue and token holders wouldn't be affected, despite the stablecoin issuer's empty coffers, the court filings said. In response to a request for comment from CoinDesk, First Digital's Chok, categorically denied any wrongdoing or participation in fraudulent schemes. Chok told CoinDesk that First Digital Trust acted strictly as a fiduciary intermediary, executing transactions precisely according to instructions provided by Techteryx and its representatives. He asserted that his company was not responsible for independently evaluating or advising on these investment decisions. "It is our understanding that one of the main blockers voiced by ARIA for early redemptions of funds (as requested by Techteryx) has been their AML/KYC concerns regarding the deal between TrueCoin and Techteryx and the true identity of the ultimate beneficial owner of Techteryx," Chok said in an email to CoinDesk, adding that he believed nobody named in the case considers Aria illiquid. "We have not yet had the opportunity to fully defend ourselves," Chok said in an email to CoinDesk. "We are fully committed to clarifying these matters in due course as the legal and arbitration process continues." Aria Group's Matthew Brittain said to CoinDesk that he "completely rejects Techteryx's claims against ARIA DMCC and any related entities," adding that "a number of false allegations were made in the court proceedings." Techteryx was fully aware of term commitments, Brittain said, and these were outlined in contracts that subscribers have agreed to when investing in ARIA CFF, which are clearly set out in the Offering Memorandum. Brittain also echoed Chok's concerns about Techteryx's beneficial ownership, pointing to Wall Street Journal coverage of the topic. The Hong Kong writ identifies Li Jinmei as the ultimate beneficial owner of Techteryx. A spokesperson for Techteryx confirmed that this is not the same person as Jennifer Yiyang — the previous ultimate beneficial owner of the company — despite some media reporting to the contrary. "The subscriber has not resolved these issues," Brittain continued, referring to the beneficial ownership concerns. While this was happening, TUSD's challenges continued in the form of a collapsing banking partner and regulatory scrutiny in the U.S. In mid-2023, Prime Trust, an independent crypto custodian based in Nevada that is not connected to this case, but which TrueUSD used for its fiat ramps, was put into receivership by state regulators. State regulators alleged Prime Trust had improperly used customer funds to cover withdrawal requests, raising serious concerns about its financial stability. Court filings from Nevada showed that Prime Trust owed around $85 million in fiat obligations with only about $3 million available. This wasn't the last headache for the stablecoin issuer. In September 2024, TrueCoin and TrustToken (the stablecoin's owners before Techteryx) settled with the SEC over allegations they falsely marketed TrueUSD as fully dollar-backed while secretly investing reserves in risky offshore funds. Without admitting wrongdoing, or detailing the nature of their offshore investments with Aria's companies, both TrueCoin and TrustToken agreed to pay civil penalties and disgorge profits to the tune of just over $500,000 to resolve charges of fraud and unregistered securities offerings. For his part, Aria's Brittain said that investing in Aria wasn't the right move to begin with for a stablecoin's reserves. "ARIA CFF has never held [its] strategy out as highly liquid, or appropriate for the reserves of a stablecoin," he said in an email. CORRECTION (April 2, 2025, 16:09 UTC): Corrects reference to court filing versus Department of Justice filing. CORRECTION (April 2, 2025 16:09 UTC): Corrects amount of loans made between Glass Door and FDT. Sign in to access your portfolio
South China Morning Post
03-04-2025
- Business
- South China Morning Post
Hong Kong lawmaker calls for support of city's Web3 sector after Tron founder flags fraud
Advertisement Hong Kong had 'a legal basis and a healthy environment' to protect international investors and the city's Web3 sector, Legislative Council member Johnny Ng Kit-chong wrote on Thursday in a blog post on X 'I have great confidence in Hong Kong's rule of law and our law-enforcement agencies,' Ng wrote. The lawmaker's assessment marks an effort to defend the reputation of Hong Kong's Web3 sector on the same day that Sun, founder of the Tron blockchain and a major Chinese cryptocurrency entrepreneur, accused local custody firm First Digital Trust of misappropriating funds of a stablecoin operator he has links to, while slamming Hong Kong's trust regulations. 'There always seems to be loopholes in the trust industry in Hong Kong, allowing circumvention of financial and banking regulations,' Sun said in a high-profile press conference in Hong Kong on Thursday. He argued that Hong Kong's reputation as a global financial centre is at stake. Hong Kong Legislative Council member Johnny Ng Kit-chong speaks at the Bitcoin Asia conference on May 9, 2024. Photo: Matt Haldane Sun alleged that First Digital Trust siphoned funds from Techteryx, the current operator of the TrueUSD stablecoin, to invest in the Aria Commodity Finance Fund in the Cayman Islands. Techteryx filed a complaint to the Hong Kong High Court last week, calling the case a 'large-scale' fraud.
Yahoo
02-04-2025
- Business
- Yahoo
Tron's Justin Sun Bailed Out TUSD as Stablecoin's $456M Reserves Were Stuck in Limbo, Filings Show
Justin Sun bailed out Techteryx's TrueUSD stablecoin after nearly half a billion dollars of its reserves were rendered illiquid, people close to the matter confirmed, and the stablecoin issuer said in Hong Kong court documents. After acquiring TrueUSD from TrueCoin in December 2020, Techteryx appointed First Digital Trust (FDT), a Hong Kong-based fiduciary, to manage its stablecoin reserves. According to documents prepared by U.S. law firm Cahill Gordon & Reindel, FDT was instructed to invest the reserves in the Aria Commodity Finance Fund (Aria CFF), a Cayman Islands-registered vehicle. However, court filings allege that approximately $456 million was instead improperly diverted into Aria Commodities DMCC, a separate, unauthorized entity based in Dubai. Court documents identify Matthew Brittain as controlling Aria Commodity Finance Fund (Aria CFF) through Aria Capital Management Ltd and Cecilia Brittain as the sole shareholder of the separately owned Dubai-based entity Aria Commodities DMCC. However, emails from Aria's Matthew Brittan are signed with an address in Dubai. Court documents say that Cecilia is Matthew's wife. ARIA DMCC engages in trade finance, asset development, and commodity trading, while ARIA CFF finances commodity traders, including ARIA DMCC and third parties, according to Matthew Brittain, who described the relationship between the two companies in an email to CoinDesk. Attestations produced by Moore CPA Limited show, first published by Protos, that FDT managed $501 million of TrueUSD's reserves by November 2024. Hong Kong court filings also say Vincent Chok, First Digital's CEO, allegedly directed around $15.5 million in undisclosed commissions to an entity called "Glass Door" and separately structured approximately $456 million in unauthorized trade finance loans from FDT to Aria DMCC, later retroactively mischaracterizing them as legitimate fund investments in actions plaintiffs describe as fraudulent misrepresentation and misappropriation. "The remittances to Aria DMCC were blatant misappropriation and money-laundering," a statement of claim reads. "They were made without the knowledge, authorization or approval of the Plaintiff." These statements have not been tried in court as of press time. Aria DMCC invested funds in global projects that they described as relatively illiquid, such as manufacturing plants, mining operations, maritime vessels, port infrastructure, and renewable energy ventures. When Techteryx attempted to redeem its investments from Aria CFF between mid-2022 and early 2023 it received little or no funds back, with Aria entities allegedly defaulting on payments and failing to fulfill redemption requests, the court documents say. Techteryx then took full operational control of TUSD in July 2023, after TrueCoin terminated its involvement. As part of a transitional period following the December 2020 sale, TrueCoin continued running the day-to-day operations of TUSD. According to the complaint Cahill prepared for the U.S. DOJ, Sun stepped in around this time to provide emergency liquidity support, which was structured as a loan. The Techteryx team then quarantined 400 million TUSD so that retail redemptions could continue and token holders wouldn't be affected, despite the stablecoin issuer's empty coffers, the court filings said. In response to a request for comment from CoinDesk, First Digital's Chok, categorically denied any wrongdoing or participation in fraudulent schemes. Chok told CoinDesk that First Digital Trust acted strictly as a fiduciary intermediary, executing transactions precisely according to instructions provided by Techteryx and its representatives. He asserted that his company was not responsible for independently evaluating or advising on these investment decisions. "It is our understanding that one of the main blockers voiced by ARIA for early redemptions of funds (as requested by Techteryx) has been their AML/KYC concerns regarding the deal between TrueCoin and Techteryx and the true identity of the ultimate beneficial owner of Techteryx," Chok said in an email to CoinDesk, adding that he believed nobody named in the case considers Aria illiquid. "We have not yet had the opportunity to fully defend ourselves," Chok said in an email to CoinDesk. "We are fully committed to clarifying these matters in due course as the legal and arbitration process continues." Aria Group's Matthew Brittain said to CoinDesk that he "completely rejects Techteryx's claims against ARIA DMCC and any related entities," adding that "a number of false allegations were made in the court proceedings." Techteryx was fully aware of term commitments, Brittain said, and these were outlined in contracts that subscribers have agreed to when investing in ARIA CFF, which are clearly set out in the Offering Memorandum. Brittain also echoed Chok's concerns about Techteryx's beneficial ownership, pointing to Wall Street Journal coverage of the topic. The Hong Kong writ identifies Li Jinmei as the ultimate beneficial owner of Techteryx. A spokesperson for Techteryx confirmed that this is not the same person as Jennifer Yiyang — the previous ultimate beneficial owner of the company — despite some media reporting to the contrary. "The subscriber has not resolved these issues," Brittain continued, referring to the beneficial ownership concerns. While this was happening, TUSD's challenges continued in the form of a collapsing banking partner and regulatory scrutiny in the U.S. In mid-2023, Prime Trust, an independent crypto custodian based in Nevada that is not connected to this case, but which TrueUSD used for its fiat ramps, was put into receivership by state regulators. State regulators alleged Prime Trust had improperly used customer funds to cover withdrawal requests, raising serious concerns about its financial stability. Court filings from Nevada showed that Prime Trust owed around $85 million in fiat obligations with only about $3 million available. This wasn't the last headache for the stablecoin issuer. In September 2024, TrueCoin and TrustToken (the stablecoin's owners before Techteryx) settled with the SEC over allegations they falsely marketed TrueUSD as fully dollar-backed while secretly investing reserves in risky offshore funds. Without admitting wrongdoing, or detailing the nature of their offshore investments with Aria's companies, both TrueCoin and TrustToken agreed to pay civil penalties and disgorge profits to the tune of just over $500,000 to resolve charges of fraud and unregistered securities offerings. For his part, Aria's Brittain said that investing in Aria wasn't the right move to begin with for a stablecoin's reserves. "ARIA CFF has never held [its] strategy out as highly liquid, or appropriate for the reserves of a stablecoin," he said in an email. CORRECTION (April 2, 2025, 16:09 UTC): Corrects reference to court filing versus Department of Justice filing. CORRECTION (April 2, 2025 16:09 UTC): Corrects amount of loans made between Glass Door and FDT. Sign in to access your portfolio
