Justin Sun Doubles Down on First Digital Trust Fraud Allegations, Urges H.K. Regulators to Act

Core Points - Justin Sun accused First Digital Trust (FDT) and its CEO Vincent Chok of exploiting Hong Kong's trust company framework to move hundreds of millions of dollars in TUSD reserves offshore [1][2] - Allegations include rerouting stablecoin reserves offshore and fabricating transaction documents to conceal these transfers [2][3] - Techteryx, the issuer of TUSD, claims that FDT was unauthorized to send funds to Aria Commodities DMCC, which are now tied up in illiquid deals [4][5] Company Actions - Techteryx appointed FDT as the fiduciary responsible for managing TUSD reserves since its acquisition in 2020 [2] - Techteryx instructed FDT to place reserves only in the Aria Commodity Finance Fund, while FDT claims it acted on instructions from Techteryx [6] Legal Developments - Dubai's Digital Economy Court has issued a worldwide freeze on assets related to the alleged misappropriation, pending resolution by Hong Kong courts [7] - The court ruling highlights serious issues that need to be addressed, adding pressure on local regulators regarding custodial practices [8] Regulatory Context - The situation poses a challenge for Hong Kong's regulatory framework as the city prepares to implement a stablecoin licensing regime focused on custodial controls for investor protection [8]