Justin Sun Alleges First Digital Trust Scandal Dwarfs FTX’s Misconduct

In a shocking revelation, Justin Sun has compared the First Digital Trust (FDT) scandal to the infamous collapse of FTX, claiming that FDT’s actions are far more egregious. While FTX’s downfall involved the misuse of user funds under the guise of pledged loans, Sun accuses FDT of outright theft of $456 million from TUSD’s custodial funds without client consent. This allegation, if proven true, could have significant repercussions for the cryptocurrency trust industry.

Justin Sun Claims First Digital Trust Scandal is Worse Than FTX

Justin Sun compared First Digital Trust (FDT) to the now-defunct FTX exchange, claiming the FDT case is ten times worse. While FTX misused user funds, at least maintaining an internal system that portrayed the activity as pledged loans, Sun alleges that FDT outright stole $456m from TUSD’s custodial funds without client authorization or knowledge. FTX filed for bankruptcy in November 2022 after revealing an $8 billion shortfall in assets.

FTX Won’t Pay $2.5B in Customer Claims Due to KYC Non-Compliance

The bankruptcy estate of the defunct cryptocurrency exchange FTX has announced it will not pay approximately $2.5 billion in claims to victims who failed to commence their KYC verification process by the March 3 deadline. According to a filing with the U.S. Bankruptcy Court for the District of Delaware, these customers are now disallowed and expunged from receiving repayment. Initially, the unverified claims were estimated to be around $1 billion.