Tron founder Justin Sun has renewed his accusations against First Digital Trust (FDT), claiming the firm moved $500 million in customer funds to banks in Dubai.
In a May 3 post on X, Sun claimed the money was spread across multiple institutions, including Mashreq Bank, Emirates NBD, Abu Dhabi Islamic Bank (ADIB), and EFG.
Tron Founder Urges Dubai to Investigate FDT
Sun also named several individuals he believes were involved in authorizing or facilitating the transfers. These include Christian Alexander Boehnke, De Lorraine Elbouef, FDT CEO Vincent Chok, Yai Sukonthabhund, Matthew William Brittain, and Cecilia Teresa Brittain.
According to him, these individuals held executive roles at FDT and related entities, which allegedly gave them the authority and access needed to misappropriate customer assets.
Alleged Flow of First Digital Trust’s Misappropriated Fund. Source: Justin Sun
Against this backdrop, Sun urged local banks, regulators, and government bodies to take immediate steps to investigate the transfers and freeze any suspicious inflows.
He also pushed for internal audits, public disclosures of any anomalies, and active cooperation from the institutions involved.
“I once again urge the Dubai government, regulators, and banks to act swiftly and decisively. Dubai must not become a safe haven for fraud and money laundering. Banks must conduct internal reviews, freeze suspicious inflows immediately, and report them proactively. Do not become enablers of criminal activity,” Sun stated.
These accusations add to a growing dispute between Sun and the Hong Kong-based custodian.
Sun has launched a $50 million bounty program to support investigations, uncover further details, and hold those responsible accountable. He has also launched a dedicated website to expose the alleged scam.
FDT has denied all accusations and filed a defamation lawsuit against Sun. Meanwhile, Hong Kong regulators have started reviewing local trust companies’ conduct in light of the allegations.
First Digital Trust’s FDUSD Stablecoin Market Cap. Source: BeInCrypto
Since the dispute began, the market capitalization of FDT’s FDUSD stablecoin has plunged. According to BeInCrypto data, the stablecoin’s market cap had dropped from over $2.5 billion to around $1.4 billion as of press time.
Elon Musk’s AI chatbot, Grok, has unintentionally become the center of a crypto controversy, promoting what could be a scam token.
The development comes amid rising concerns of fraudulent crypto, questioning the integrity of token launchpads such as Solana-based Pump.fun, among others.
Crypto Scam Alert: Did Grok AI Accidentally Pump a Token?
Grok, afterbeing prompted by a user’s leading question, initially suggested “GrokCoin” as the name of a meme coin. It then provided a wallet address for the said GrokCoin in response to a now deleted post. Grok also clarified that GROKCOIN is a meme coin on the Solana blockchain, inspired by xAI’s Grok AI.
“GROKCOIN, mentioned in the post, is a memecoin on the Solana blockchain, with the wallet address 3MadWqcN9cSrULn8ikDnan9mF3znoQmBPXtVy6BfSTDB. It’s inspired by xAI’s Grok AI, launched in November 2023, and trades with a current market cap of around $17 million, per CoinMarketCap, but its value is highly volatile.” Grok indicated.
Shortly after, the token’s market capitalization surged to $12 million, with an astonishing $51.9 million trading volume. At press time, the GrokCoin had a market cap of over $25 million. Meanwhile, data on GMGN shows the token’s value soared nearly 100,000%. This surge came as unsuspecting investors bought into what is likely an orchestrated scheme.
“Grok casually dropping a meme coin name, and the market instantly throws millions at it, peak crypto behavior. AI narratives + meme coins are a different kind of money printer no doubt about that,” one user quipped.
Despite this, skepticism remains high. It appears that an individual intentionally created the token before prompting Grok to mention the coin and wallet address publicly. This assumption comes as the question leading to Grok’s response was quickly deleted, suggesting a deliberate effort to manipulate the market.
It is also worth noting that the creator of GrokCoin has created over 470 coins, according to data from Soul Scanner
The incident highlights how scammers exploit AI tools to create and promote fraudulent tokens. It raises serious concerns about the growing trend of AI-driven crypto scams and market manipulation.
Following the latest development, similar Grok-themed tokens are flooding the Solana-based platform Pump.fun. This further adds to market manipulation concerns and potential investor losses.
Regulators are taking notice of these deceptive practices. A new bill proposed in New York aims to impose strict penalties on crypto scammers. As BeInCrypto reported, the bill defines civil fines of up to $5 million for fraudulent activities.
Such measures highlight the growing urgency to combat illicit schemes and protect investors from falling victim to AI-driven fraud.
Earlier reports from VanEck’s Matthew Sigel suggested that Circle’s planned IPO had a $4 to $6 billion equity valuation. So, it looks like Ripple attempted to match that valuation.
The planned IPO and current circumstances suggest that Circle may be open to acquisition offers in the future. After all, analysts have previously raised concerns about Circle’s financials.
Circle’s revenues grew 16% but EBITDA and Net Income fell sharply.
Why? Four main reasons –>
Increased Partner Costs: A significant rise in distribution and transaction costs driven by higher fees paid to partners like Coinbase, due to increased reserve income and strategic… https://t.co/CHEv1PFdOk
— matthew sigel, recovering CFA (@matthew_sigel) April 1, 2025
Ripple’s executives, for their part, recently asserted that they have no plans to go public. However, the company has shown increasing interest in acquisitions.
Under Trump’s pro-crypto shift, Ripple is seeing a major opportunity to achieve dominance in the US market. As the SEC lawsuit nears an end, the firm is seemingly eyeing an aggressive expansion strategy.
It would be a powerful business opportunity if the firm could take over Circle’s stablecoin expertise and market share. For now, it is unclear if any further negotiations will take place, or if any other firms will make larger offers.
Since its launch in late March, World Liberty Financial’s stablecoin USD1 has achieved an impressive market capitalization, reflecting strong investor interest. If the creators want to maximize USD1’s reach by accessing markets abroad, particularly in Europe, they must confront MiCA’s extensive compliance list.
In a BeInCrypto interview, experts from Foresight Ventures, Kaiko, and Brickken stressed the importance of stablecoin issuers having substantial European bank reserves, operational volume caps protecting the euro, and transparent USD1 information to ensure transparency and avoid conflicts of interest.
USD1’s Search for Dollar Dominance
World Liberty Financial (WLF), a decentralized finance (DeFi) project heavily associated with the Trump family, officially launched USD1 a month ago. Through this stablecoin, WLF aims to promote dollar dominance worldwide.
So far, this initiative has been working well for WLF. According to CoinGecko, USD1 has now surpassed a market capitalization of $128 million and reached a 24-hour trading volume of nearly $41.6 million. The project has already released 100% of its total supply of 127,971,165 tokens.
USD1’s market capitalization over the past 24 hours. Source: CoinGecko.
For WLF to seriously establish dollar dominance across the globe, it will have to move fast and efficiently. This urgency stems from the need to surpass its main competitors, USDT and USDC. These rivals currently hold a massive market share advantage.
Additionally, there’s a need to maintain a competitive advantage against established currencies like the euro.
USD1 needs to access foreign markets and stand out from established competitors to achieve this. Should Europe become a primary target, USD1 must prepare to tackle numerous challenges head-on.
The EU’s Stringent Compliance Demands
The European Union (EU) became the first jurisdiction in the world to establish a comprehensive regulatory framework for digital assets across its 27 member states. This regulation, known as Markets in Crypto-Assets (MiCA), has been in effect for nearly four months. Through this legislation, the EU has confirmed how seriously it takes compliance with a defined regulatory regime.
The regulation is detailed and clear, leaving no room for interpretation. If USD1 wants to operate in this crypto market of 31 million users, it must ensure it meets every demand.
US Senators Flag Risks of Presidential Involvement in USD1
In the letter, the group asked both agencies to clarify how they plan to uphold regulatory integrity following the issuance of USD1.
The Senators cautioned that letting a president personally benefit from a digital currency overseen by federal agencies he has sway over is a big risk to the financial system. They argued that an unprecedented situation like this one could hurt people’s trust in how regulations are made.
“The launch of a stablecoin directly tied to a sitting President who stands to benefit financially from the stablecoin’s success presents unprecedented risks to our financial system,” they argued.
The letter further detailed situations where Trump could directly or indirectly affect decisions regarding USD1.
As things stand, USD1 isn’t well-prepared to follow MiCA’s strict reporting and transparency rules.
How Do Concerns Over USD1 Impact MiCA Acquisition?
According to Ianeva-Aubert, if USD1 doesn’t clear up doubts over potential conflicts of interest, this would affect its ability to apply for an operating license in the European Union.
“MiCA requires strong governance, including independent directors and clear separation between owners and managers. Issuers must have clear rules to handle conflicts of interest. If USD1 has any conflicts, this could make it harder to comply,” she said.
Ianeva-Aubert also highlighted that WLF still hasn’t released enough public information on USD1 to assess the degree of its compliance effectively. In particular, the stablecoin issuer has not disclosed the measures it would take to safeguard against market manipulation.
As of now, USD1 would likely fail MiCA’s transparency tests. However, industry experts pointed out other parts of the framework that might be even larger obstacles for USD1 to operate across the European Union.
Impact of the EU’s Reserve Mandate on USD1
When asked about the biggest regulatory hurdles USD1 would face in securing a MiCA license, experts’ responses were unanimous. The stablecoin would need to store a large portion of its reserves in a European bank.
This mandate has proven difficult for established stablecoin issuers seeking operations across the region.
This regulation aims to ensure seamless accessibility for European crypto users and traders. For Forest Bai, Co-founder of Foresight Ventures, USD1 could capitalize on this opportunity during the early stages of its development. By doing so, it could avoid some of the obstacles its competitors had to endure.
Yet, even as USD1 scales and its demand grows, other mandatory requirements could restrict its scope of success.
MiCA’s Transaction Volume Caps to Preserve Euro Dominance
As part of the MiCA regulation, the European Union has taken specific measures to safeguard the euro’s dominance. If a digital currency not denominated in euros were to become extensively adopted for daily payments within Europe, it could present a potential risk to the European Union’s financial sovereignty and the stability of the euro.
To contain this possibility, MiCA places volume caps on transactions used as a means of exchange within the EU.
In other words, MiCA establishes predefined limits on the transactional volume of such currencies. The EU initiates regulatory measures when these limits are exceeded due to widespread payment usage.
Specifically, USD1 issuers must suspend any further digital currency issuance and provide a remediation plan to the relevant regulator, outlining steps to ensure their usage does not negatively impact the euro.
If USD1 wants to work in places where it can experience uninhibited growth, the European market might not be the best fit for this stablecoin. Other parts of MiCA also suggest this could be the case.
MiCA Limitations to Stablecoins as Investment Vehicles
EU regulators have been clear that stablecoins, or e-money tokens (EMTs), as the regulation refers to them, are payment instruments that should not be confused with investment vehicles. The MiCA framework has a few rules in place to prevent this.
Given the circumstances, experts like Bai think WLF might want to focus on countries with better market conditions for stablecoin issuers.
Should WLF Consider the EU Market for USD1 Operations?
While the European Union has an undeniable crypto market presence, other jurisdictions have an even larger footprint.
”The EU’s crypto market remains comparatively small, with just 31 million users versus Asia’s 263 million and North America’s 38 million users, according to a report from Euronews. This limited market size may not justify MiCA compliance costs for projects, like WLFI,” Bai told BeInCrypto, adding that “Projects ultimately determine their own growth strategy. Given that, currently, the EU represents a secondary market for USD1, the project’s strategic priorities may naturally shift toward regions with less stringent stablecoin regulations to drive its adoption.”
These circumstances alone may prompt USD1 to reconsider its options.
In fact, USD1 could start by gaining a competitive edge right at home.
USD1’s Political Backing at Home
With a crypto-friendly president in office –whose very crypto project officially announced the launch of USD1– the stablecoin has sufficient backing to make its mark.
Looking past the immediate future, Bai underlined that if the US doesn’t keep developing supportive crypto regulations, USD1’s growth in the country could be held back following a government shift.
Given this reality, USD1’s failure to comply with the EU’s regulations, should it ever even consider applying for a MiCA license in the first place, could have negative consequences for the project’s long-term viability.
Regardless of the markets WLF evaluates in its efforts to increase the reach of USD1, compliance with general stipulations concerning transparency, legal architecture, and real-time transaction oversight could be conducive to its eventual success.
