Hong Kong lawmaker Johnny Ng has vowed that authorities will act shortly if fraud allegations in opposition to First Digital Belief (FDT), the issuer of the FDUSD stablecoin, are confirmed.
In an April 3 submit on X, Ng assured buyers that the town’s crypto regulatory framework stays strong and dedicated to investor safety regardless of the current high-profile controversy.
Based on him:
“Hong Kong has a authorized foundation and a wholesome setting for shielding worldwide buyers and the Web3 business. I urge worldwide buyers and tech practitioners to not fear a couple of single incident and to really feel assured in persevering with to take a position and develop in Hong Kong.”
His feedback observe accusations by Tron founder Justin Solar, who claims FDT mishandled consumer funds, prompting issues about regulatory gaps within the metropolis’s belief firm oversight.
Ng acknowledged receiving a number of complaints this yr involving suspected fraud tied to belief firm practices. Contemplating this, he famous a transparent must overview and strengthen the foundations governing such corporations.
He mentioned:
“My workplace and the Anti-Fraud Alliance have certainly acquired a couple of case this yr involving suspected fraud using the traits of belief corporations. I imagine there’s a want to debate the right way to enhance the regulatory framework for related belief corporations sooner or later to forestall criminals from exploiting loopholes for fraud.”
Justin Solar vs. First Digital Belief
On April 2, Solar claimed that FDT confronted insolvency after allegedly misappropriating almost $500 million in consumer funds.
Based on Solar, FDT diverted Techteryx’s TrueUSD (TUSD) reserves by capitalizing on the insufficient regulatory oversight in Hong Kong’s crypto belief sector.
Solar mentioned:
“This case reveals that there look like clear loopholes in Hong Kong’s belief business that can be utilized to bypass monetary and banking rules. This not solely poses dangers to the general public, but additionally threatens Hong Kong’s fame as a world monetary heart.”
FDT, nonetheless, has pushed again firmly in opposition to the allegations.
In its response, the corporate dismissed Solar’s claims as false and unrelated to its FDUSD stablecoin.
FDT clarified that the dispute stems from TUSD operations and accused Solar of avoiding authorized avenues in favor of a public smear marketing campaign to wreck its fame.
The belief firm said:
“Justin Solar’s baseless accusations received’t distract from Techteryx’s personal failures— our stablecoin FDUSD stays totally backed and solvent.”
FDT confirmed it’s in search of authorized counsel and can take steps to defend its enterprise and fame from what it referred to as a deceptive narrative.
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