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Hong Kong lawmaker Johnny Ng has vowed that authorities volition enactment rapidly if fraud allegations against First Digital Trust (FDT), the issuer of the FDUSD stablecoin, are confirmed.
In an April 3 post connected X, Ng assured investors that the city’s crypto regulatory model remains robust and committed to capitalist extortion contempt the caller high-profile controversy.
According to him:
“Hong Kong has a ineligible ground and a steadfast situation for protecting planetary investors and the Web3 industry. I impulse planetary investors and tech practitioners not to interest astir a azygous incidental and to consciousness assured successful continuing to put and make successful Hong Kong.”
His comments travel accusations by Tron laminitis Justin Sun, who claims FDT mishandled lawsuit funds, prompting concerns astir regulatory gaps successful the city’s spot institution oversight.
Ng acknowledged receiving aggregate complaints this twelvemonth involving suspected fraud tied to spot institution practices. Considering this, helium noted a wide request to reappraisal and fortify the rules governing specified firms.
He said:
“My bureau and the Anti-Fraud Alliance person so received much than 1 lawsuit this twelvemonth involving suspected fraud utilizing the characteristics of spot companies. I judge determination is simply a request to sermon however to amended the regulatory model for applicable spot companies successful the aboriginal to forestall criminals from exploiting loopholes for fraud.”
Justin Sun vs. First Digital Trust
On April 2, Sun claimed that FDT faced insolvency aft allegedly misappropriating astir $500 cardinal successful lawsuit funds.
According to Sun, FDT diverted Techteryx’s TrueUSD (TUSD) reserves by capitalizing connected the inadequate regulatory oversight successful Hong Kong’s crypto spot sector.
Sun said:
“This lawsuit shows that determination look to beryllium wide loopholes successful Hong Kong’s spot manufacture that tin beryllium utilized to circumvent fiscal and banking regulations. This not lone poses risks to the public, but besides threatens Hong Kong’s estimation arsenic a planetary fiscal center.”
FDT, however, has pushed backmost firmly against the allegations.
In its response, the institution dismissed Sun’s claims arsenic mendacious and unrelated to its FDUSD stablecoin.
FDT clarified that the quality stems from TUSD operations and accused Sun of avoiding ineligible avenues successful favour of a nationalist smear run to harm its reputation.
The spot institution stated:
“Justin Sun’s baseless accusations won’t distract from Techteryx’s ain failures— our stablecoin FDUSD remains afloat backed and solvent.”
FDT confirmed it is seeking ineligible counsel and volition instrumentality steps to support its concern and estimation from what it called a misleading narrative.
The station Hong Kong reevaluates crypto spot rules amid Justin Sun’s First Digital Trust allegations appeared archetypal connected CryptoSlate.
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