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Hong Kong lawmaker calls for support of city’s Web3 sector after Tron founder flags fraud

The call comes after cryptocurrency mogul Justin Sun denounced alleged ‘loopholes’ in Hong Kong’s trust regulations

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Justin Sun, founder of the Tron blockchain, speaks at a press conference on Thursday in Tsim Sha Tsui, where he accused First Digital Trust of misappropriating funds of a stablecoin operator he has links to. Photo: Edmond So
Xinmei Shen
A Hong Kong lawmaker urged global investors to maintain confidence in the city’s Web3 industry after cryptocurrency mogul Justin Sun denounced alleged “loopholes” in local financial regulations.
Hong Kong had “a legal basis and a healthy environment” to protect international investors and the city’s Web3 sector, Legislative Council member Johnny Ng Kit-chong wrote on Thursday in a blog post on X.

“I have great confidence in Hong Kong’s rule of law and our law-enforcement agencies,” Ng wrote.

The lawmaker’s assessment marks an effort to defend the reputation of Hong Kong’s Web3 sector on the same day that Sun, founder of the Tron blockchain and a major Chinese cryptocurrency entrepreneur, accused local custody firm First Digital Trust of misappropriating funds of a stablecoin operator he has links to, while slamming Hong Kong’s trust regulations.

“There always seems to be loopholes in the trust industry in Hong Kong, allowing circumvention of financial and banking regulations,” Sun said in a high-profile press conference in Hong Kong on Thursday. He argued that Hong Kong’s reputation as a global financial centre is at stake.

Hong Kong Legislative Council member Johnny Ng Kit-chong speaks at the Bitcoin Asia conference on May 9, 2024. Photo: Matt Haldane
Hong Kong Legislative Council member Johnny Ng Kit-chong speaks at the Bitcoin Asia conference on May 9, 2024. Photo: Matt Haldane

Sun alleged that First Digital Trust siphoned funds from Techteryx, the current operator of the TrueUSD stablecoin, to invest in the Aria Commodity Finance Fund in the Cayman Islands. Techteryx filed a complaint to the Hong Kong High Court last week, calling the case a “large-scale” fraud.

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