Hong Kong lawmaker Johnny Ng has vowed that authorities will act rapidly 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 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 surroundings for safeguarding 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 speculate 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 have to evaluate and strengthen the principles governing such companies.
He mentioned:
“My workplace and the Anti-Fraud Alliance have certainly acquired multiple case this yr involving suspected fraud using the traits of belief corporations. I imagine there’s a want to debate learn how 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.
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 fame as a world monetary middle.”
FDT, nevertheless, 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 fame.
The belief firm acknowledged:
“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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