Justin Sun, founder of TRON posted on social media platform X and exposed a financial scandal involving First Digital Trust (FDT) and Aria Entities. This case involves embezzlement of around $500 million in funds which were supposed to be invested in the Aria Commodity Finance Fund (ACFF), managed by Aria Capital Management Ltd.
However, the funds were diverted to Aria Commodities DMCC, a separate entity based in Dubai, without any authorization.
The Scandal Unfolds
Authorized Investment: Techteryx initially authorized investments in ACFF. The only authorized investment target.
Vague Contract Terms: The contract referred to “Aria Commodities – Class D 6.0% 3 YR USD,” which seemed like a commodity fund product of Aria Capital but did not provide clarity on whether it was ACFF. There were no full names, place of registration or fund number to identify the entity.
Misleading Entity Registration: Aria Commodities DMCC was registered in Dubai with a name that was almost identical to legitimate Aria entities. This created confusion and people believed that it was a substructure or product of a legitimate fund but turns out it was a completely different entity not included in the authorization.
Unauthorized Transfer: FDT transferred approximately $456 million to Aria Commodities DMCC, which was not authorized by Techteryx.
Justin Sun’s Intervention
Justin Sun stepped in to rescue TrueUSD after nearly $500 million in reserve funds become illiquid due to this fraud. Sun has accused FDT of violating fiduciary duties and engaging in unlicensed investment activities.
The founder of TRON also launched a bounty program worth $50 million to aid investigation and recover the lost funds and also emphasized that there is a need for stricter regulatory accountability in Hong Kong.
Legal and Regulatory Implications
The CEO of FDT Vincent Chok has denied any misconduct. However, according to the court papers, there high chances the company may have misled investors and misused funds. As there are new developments everyday in the scandal, Justin Sun’s action to reveal the insights have drawn a significant attention, highlighting the need for accountability in financial sector.
Authorities are currently investigating the allegations and the case may lead to changes in regulatory oversight to prevent such incidents in the future.
Also Read: Airdrop Hack: Kaito-Wayfinder Loses $190,000 to MEV Bot
