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 traders that town’s crypto regulatory framework stays strong 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 atmosphere for safeguarding worldwide traders and the Web3 business. I urge worldwide traders 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 shopper funds, prompting issues about regulatory gaps within the metropolis’s belief firm oversight.
Ng acknowledged receiving a number of complaints this 12 months involving suspected fraud tied to belief firm practices. Contemplating this, he famous a transparent have to evaluation and strengthen the principles governing such companies.
He mentioned:
“My workplace and the Anti-Fraud Alliance have certainly acquired multiple case this 12 months involving suspected fraud using the traits of belief corporations. I imagine there’s a want to debate how one can enhance the regulatory framework for related belief corporations sooner or later to stop criminals from exploiting loopholes for fraud.”
Justin Solar vs. First Digital Belief
On April 2, Solar claimed that FDT confronted insolvency after allegedly misappropriating practically $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 avoid monetary and banking laws. This not solely poses dangers to the general public, but additionally threatens Hong Kong’s status as a worldwide 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 break its status.
The belief firm acknowledged:
“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 looking for authorized counsel and can take steps to defend its enterprise and status from what it known as a deceptive narrative.
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