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Justin Sun provided more details about how over $500M of TUSD reserves was misappropriated by FDT and ARIA linked entities.
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The funds were transferred through Dubai banks, prompting regulatory intervention.
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The individuals named include TrueCoin executives, FDT executives, Finoport executives, and ARIA Commodities executives.
Justin Sun, TRON’s founder, has released an update on a “$500,000,000 fraud” that involved misappropriated TrueUSD reserves (TUSD).
The alleged scheme revolves around a web individuals and entities connected to First Digital Trust (FDT), Legacy Trust and ARIA Commodities. Funds are reportedly flowing in financial institutions in Dubai.
Sun Names Allegedly Responsible Individuals and Entities
Sun said that the newly launched Web3Bounty.io was responsible for increasing transparency in tracking large-scale crypto fraud. He named five people allegedly involved.
- Christian Alexander Boehnke De Lorraine Elbouef, Head of Finance & Operations for TrueCoin (TUSD), the former operator of TrueUSD
- Vincent Chok, CEO of First Digital Trust and Legacy Trust
- Yai Sukonthabhund, former CEO of Crossbridge and now a partner with Finoport
- Matthew William Brittain, Investment Manager for ARIA Commodity Finance Fund and DMCC
- Cecilia Teresa Brittain is the sole shareholder of Aria Commodities DMCC
Flow-of-funds data suggests that over $565m in TUSD fiat reserve was allegedly misappropriated from 2020 to 2022. The funds were transferred via FDT and Legacy Trust to accounts controlled by ARIA Commodities DMCC, ACFF and Finoport with Finoport as the investment manager.
Related Justin Sun’s $500M Bailout TUSD Exposes Weaknesses of Hong Kong Trust Regulation
Sun calls for UAE action after Dubai Banks are implicated
The money was funneled through at least four Dubai banks: Mashreq Bank (ADIB), Emirates NBD (EFG), and Emirates NBD. Sun called for the UAE government and regulators to act quickly.
Sun said that banks must conduct internal reviews and freeze suspicious inflows as soon as possible. They should also report these incidents proactively. “Do not enable criminal activity.”
He said he is confident that the UAE will take a firm stand against financial crimes in the Web3 age.
Background: TUSD Reserve Issues, and Sun’s Previous Bailout
This update comes after the April revelations that Sun had quietly provided emergency liquid to Techteryx (the current issuer of TUSD) after nearly $456 millions in reserves were locked up in illiquid investment.
Techteryx acquired TUSD by 2020 and appointed FDT as its reserve manager. FDT diverted funds, however, to Aria Commodities DMCC. This company used the funds for unauthorized investments, such as manufacturing plants and renewable energies projects. They failed to meet redemption requests when liquidity was required.
Related: ‘Smear campaign’: First Digital responds forcefully to Justin Sun’s attacks
Documents filed in court outline allegations of fraudulent misrepresentation, misappropriation of money and other crimes. FDT and Aria both deny any wrongdoing.
TUSD has also had to deal with additional challenges including the collapse Prime Trust and a U.S. SEC Settlement tied to misleading marketing regarding its reserve backing.
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