Hong Kong lawmaker Johnny Ng has vowed that authorities will act shortly if fraud allegations towards First Digital Belief (FDT), the issuer of the FDUSD stablecoin, are confirmed.
In an April 3 put up on X, Ng assured buyers that the town’s crypto regulatory framework stays sturdy and dedicated to investor safety regardless of the current high-profile controversy.
In response to him:
“Hong Kong has a authorized foundation and a wholesome surroundings for shielding worldwide buyers and the Web3 business. I urge worldwide buyers and tech practitioners to not fear a few single incident and to really feel assured in persevering with to speculate and develop in Hong Kong.”
His feedback comply with accusations by Tron founder Justin Solar, who claims FDT mishandled shopper funds, prompting considerations 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 have to assessment and strengthen the principles governing such companies.
He mentioned:
“My workplace and the Anti-Fraud Alliance have certainly obtained multiple case this yr involving suspected fraud using the traits of belief firms. I imagine there’s a want to debate how one can enhance the regulatory framework for related belief firms 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 shopper funds.
In response to 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 exhibits that there seem 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 in addition threatens Hong Kong’s status as a worldwide monetary heart.”
FDT, nonetheless, has pushed again firmly towards 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 break its status.
The belief firm said:
“Justin Solar’s baseless accusations gained’t distract from Techteryx’s personal failures— our stablecoin FDUSD stays absolutely backed and solvent.”
FDT confirmed it’s in search of authorized counsel and can take steps to defend its enterprise and status from what it referred to as a deceptive narrative.