HONG KONG — Justin Sun, the founding father of the Tron blockchain and an adviser to TrueUSD issuer Techteryx, returned to the podium in Hong Kong with a extra forceful version of allegations he first aired in April, accusing First Digital Have confidence (FDT), a fiduciary company, and its CEO Vincent Chok of exploiting gaps within the metropolis’s belief company framework to switch a total bunch of hundreds and hundreds of bucks in TUSD reserves offshore.
At a Thursday press convention within the metropolis, Sun alleged the Hong Kong belief company not only rerouted the stablecoin’s reserves offshore however moreover fabricated transaction documents to conceal the transfers.
Techteryx obtained TUSD in 2020 and appointed FDT to be the fiduciary accountable for holding and managing the reserves backing the token.
The discover-up press convention comes months after Sun disclosed a liquidity shortfall in TUSD’s reserves and alleged that Hong Kong’s belief regulationslet FDT reroute nearly half of one billion bucks into illiquid offshore vehicles with out authorization, as CoinDesk reported earlier this one year.
In court filings, Techteryx claimed the transfers went to Aria Commodities DMCC — to not a fund called Aria CFF, as it before the total lot acknowledged it used to be directed — and had been tied up in illiquid commodity and infrastructure offers that would also not be redeemed, allegations Aria has denied.
Unauthorized money transfers?
Both Techteryx and Aria agree that the reserves ended up in Aria-linked entities. The dispute amenities on whether FDT used to be authorized to ship the funds there and whether it understood the sources would possibly per chance well well be committed to long-term, illiquid replace-finance initiatives, which would possibly per chance well well be depraved for stablecoin reserves.
Techteryx says it suggested FDT to residence reserves only within the Aria Commodity Finance Fund, a Cayman automobile. FDT denies it diverted the money as a replace to Aria Commodities DMCC, asserting it acted strictly on instructions from Techteryx or its representatives. Aria, for its piece, says the sources had been placed into term-basically based financing arrangements per the agreements it believed had been in residence.
Since the indispensable press convention, Dubai’s Digital Economic system Courtroom has issued a world freeze on sources tied to the alleged misappropriation. The ruling does not resolve legal responsibility and used to be granted on the premise that there were serious complications to be tried.
The present locks down the sources until Hong Kong courts unravel the dispute, including exterior stress on native regulators to address the custodial practices on the center of the case. The episode has change into a test of how Hong Kong regulates belief companies at a time when the metropolis is making ready a stablecoin licensing regime wherein custodial controls will be central to investor safety.
All of this raises questions about how Hong Kong’s regulators and legislation enforcement will reply as the metropolis prepares a stablecoin licensing regime that is dependent on solid custodial oversight.
Hong Kong lawmakers acknowledge flaws in Have confidence regime
Critics, fancy Sun, bear called out Hong Kong’s Have confidence or Company Carrier Provider (TCSPs) regime, which licenses and oversees non-bank belief companies, for allowing client sources to be moved with out the transaction-stage safeguards that apply to banks. Below the framework, belief companies are not required to break prior regulatory reputation of considerable transfers.
TCSPs are supervised by the Companies Registry in desire to financial regulators, and end not face capital requirements or transaction monitoring reminiscent of banks or licensed securities intermediaries.
“Any proprietor of the belief can usually switch their client’s sources into any memoir he desire. You would possibly per chance well per chance have the selection to fair bear one single transaction … and fair one particular person can end that,” Sun acknowledged in an interview. “The regulators desire to shut it straight.”
Lawmakers in Hong Kong bear acknowledged this divulge. Legislative Council member Johnny Ng — an suggest for the territory’s Web3 sector — acknowledged in April that multiple suspected fraud cases inviting belief companies had already been reported to his place of job and that the metropolis needs to give a enhance to its belief-company regulatory framework.
根據傳媒報道，今天有Web3企業申訴表示在港懷疑被信託公司非法轉移5億美元資產，我也在立法會回應了事件，並會見當時人申訴。不少行業朋友和傳媒向我查詢事件看法，我有以下幾點回應 :
1.… pic.twitter.com/Qm29sfsV1f
— Johnny Ng 吴杰庄 (@Johnny_nkc) April 3, 2025
FDT says it used to be following instructions
FDT maintains it adopted Techteryx’s instructions, denies misappropriating funds and says it does not management Aria’s sources.
As a replace, it argues that the money grew to change into complicated to retrieve due to the Aria raised anti-money laundering (AML) and know-your-customer (KYC) considerations about Techteryx’s possession, not due to the FDT knowingly placed reserves into illiquid offers.
The Techteryx instructions cited by FDT, Sun alleged, had been fabricated.
“Now we bear proof they bear got been fabricating the total transaction documents,” Sun claimed in an interview with CoinDesk.
Per a expect of for comment from CoinDesk, Chok acknowledged FDT sought an injunction to restrain the clicking match for the rationale that company is currently suing Sun for defamation.
“[This was to] forestall exactly what came about: unproven and baseless defamatory remarks about FDT,” Chok suggested CoinDesk. “Sun equipped no proof to give a enhance to his out of the ordinary claims diversified than sharing public data about long-established court cases in this saga.”
On X, FDT acknowledged it welcomes any steps that advantage Techteryx in convalescing its sources from Aria.
“Our residence stays grounded in documented info and the judicial file. We desire to seek data from the funds launched and justice done through exact exact route of,” Chok persisted.
Sun acknowledged that he expects extra traits sooner than the end of the one year.
