Justin Sun Calls for Reform of Hong Kong's Trust Laws After TUSD Misappropriation Allegations

Sun said astatine a property league that the existent laws incorporate systemic loopholes.

Apr 3, 2025, 9:58 a.m. UTC

HONG KONG—It was a conflict of stablecoin issuers Thursday day successful Hong Kong, with Justin Sun, the laminitis of the Tron blockchain, and First Digital Trust (FDT), a Hong Kong-based fiduciary, holding property conferences over allegations of money misappropriation involving Techteryx's TrueUSD reserves.

Sun doubled down connected claims that TrueUSD's reserves were "misappropriated by a fewer atrocious actors," starring to him needing to softly bail retired the stablecoin.

Sun pointed a digit the Hong Kong regulatory model surrounding trusts, arguing astatine the property league that loopholes and escaped rules allowed the alleged misappropriation to occur.

"This concern highlights a superior situation to the integrity of the fiscal strategy that indispensable beryllium addressed," helium said. "I recovered it hard to judge the standard of fraud orchestrated by a agelong database of licensed intermediaries."

Sun adjacent said that for the clip being, Hong Kong spot companies should beryllium avoided entirely, and urged regulators to instrumentality decisive enactment to safeguard the city's planetary fiscal reputation.

For that case, Sun mightiness person an state successful the signifier of Hong Kong lawmaker Johnny Ng — called the city's Web3 politician. He released a statement saying that he's alert of aggregate reports this twelvemonth of alleged fraud exploiting spot companies, and acknowledged that section regularisation needs to beryllium improved.

First Digital Trust denies each allegations

After Sun's property conference, First Digital Trust held its ain lawsuit connected X, with CEO Vincent Chok saying Sun had yet to nutrient "one coagulated portion of evidence" to backmost up his claims.

FDT followed its fiduciary duties, acted successful clients' champion interests, complied with instructions from Sun and his nominees, which were signed disconnected by Techteryx directors, and noted that the institution is taxable to third-party audits, Chok said.

Chok, however, acknowledged helium was antecedently unaware of the familial transportation betwixt Aria CFF and Aria DMCC — the funds wherever TUSD's reserves are held up.

In a complaint to the Department of Justice, Techteryx noted that Aria CFF, the money it said is authorized to clasp TrueUSD's reserves is managed by Matthew Brittain. Aria DMCC, which Techteryx said is unauthorized, is controlled by his spouse, Cecilia Brittain.

Chok said FDT is moving to retrieve funds, but know-your-customer (KYC) and anti-money laundering (AML) issues involving the eventual beneficial proprietor of Techteryx are seemingly holding things up.

He besides rejected Sun's claims successful a station connected X that First Digital Trust is incapable to fulfill redemption obligations of its FDUSD stablecoin. The token is inactive precise overmuch solvent, Chok said.

FDT said it plans to prosecute ineligible action implicit Sun's claims.

Earlier, the company posted examples of on-chain information showing redemptions going through.

Sam Reynolds

Sam Reynolds is simply a elder newsman based successful Asia. Sam was portion of the CoinDesk squad that won the 2023 Gerald Loeb grant successful the breaking quality class for sum of FTX's collapse. Prior to CoinDesk, helium was a newsman with Blockworks and a semiconductor expert with IDC.