Hong Kong-It was a battle for stablecoin issuers on Thursday afternoon in Hong Kong, with Justin Sun, the founder of Tron Blockchain, and First Digital Trust (FDT), a Hong Kong-based Fiduciary, which holds press conferences on accusations of fund’s mourning of fund involving Techteryx’s TRUEUSD reserve.

The sun doubled on allegations that Trueusd’s reserves were “wrongly used by a couple of bad actors”, which led him to stuck to stableecoin.

The sun pointed a finger Hong Kong legislative framework around Trusts and argued at the press conference that loopholes and loose rules allowed the alleged abuse.

“This situation highlights a serious challenge for the integrity of the financial system to be addressed,” he said. “I had a hard time believing in the extent of fraud orchestrated by a long list of licensed intermediaries.”

SUN even said that Hong Kong confidence companies should currently be avoided completely and urged the supervisory authorities to take crucial steps to protect the city’s global economic reputation.

In this case, Sun may have an ally in the form of Hong Kong legislator Johnny NG -called the city’s web3 politician. He released a statement that he is aware of several reports this year on alleged fraud, utilizing trust companies and acknowledging that local regulation needs to be improved.

First Digital Trust denies all claims

After Sun’s press conference, First Digital Trust held his own event at X, where CEO Vincent Shock said Sun had not yet presented “a solid proof” of taking back up his claims.

FDT followed his trust tasks, acted in clients’ best interests, complied with instructions from Sun and his nominees, signed by Techteryx directors, and noted that the company is subject to third-party audits, shock said.

However, shock acknowledged that he was previously unaware of the familial connection between Aria CFF and Aria DMCC – the funds in which Tusds reserves are held.

In a complaint to the Department of Justice, Techteryx noted that Aria CFF, the fund it said, is authorized to hold the Trueusd’s reserves, led by Matthew Brittain. Aria DMCC, which Techteryx said is unauthorized, is controlled by his spouse, Cecilia Brittain.

Shock said that the FDT is working on recovering funds, but know-your-custom (KYC) and anti-money-white laundering (AML) problems involving the ultimate beneficial owner of Techteryx apparently keeps things up.

He also rejected Sun’s claims in a post about X that First Digital Trust is unable to fulfill redemption obligations for its FDUSD stableecoin. The token is still very solvent, shock.

FDT said it is planning to pursue litigation over Sun’s claims.

Previously, the company published examples of data on chain showing redemptions underwent.