🌩️ Meeting in Hong Kong, I was discussing with a few friends how the #Crypto environment in Hong Kong is becoming increasingly free, much more so than when I first entered the space in 2017 with its open regulations. We happened to talk about the recent incident exposed at Sun's press conference a few days ago—
@justinsuntron revealed that Techteryx (the holder of TUSD stablecoin) discovered that its $500 million reserve held in the Hong Kong FDT Trust had been misappropriated. The funds were illegally transferred through the Dubai private company Aria DMCC (controlled by a Cayman fund affiliate), involving two licensed trust companies in Hong Kong, FDT and Legacy Trust, as well as collusion with TrueCoin and Cayman funds.
Many people have not paid attention to this matter, but this Hong Kong scandal, once exposed by Sun, has attracted significant attention, directly pointing to two major loopholes in the Hong Kong trust industry—
1⃣ License abuse risk: FDT, as a licensed institution, exploited regulatory trust to commit crimes, exposing insufficient license review and ongoing supervision.
2⃣ Lack of cross-border collaboration: Funds were transferred through offshore centers like Dubai and the Cayman Islands, making it difficult for the Hong Kong Monetary Authority to trace cross-jurisdictional funding chains.
The timeline is very concealed; the misappropriation began after Techteryx acquired TUSD in 2020, only becoming apparent in 2023 when interest payments became abnormal. During this period, Hong Kong promoted and established an image of compliance and safety.
Therefore, Sun's decision to personally cover the losses and act as a high-profile "whistleblower" is not only a response to a single fraudulent incident but also a call for the reconstruction of compliance in the crypto industry and the financial trust system.
I believe this reflects and promotes some deep-seated issues in the blockchain industry—
As a "transparently audited" stablecoin, it also faces "black box" and systemic risks. Most rely on traditional financial institutions for custody, but the latter lacks the transparent traceability of blockchain. There is still a need to establish a dual verification system for on-chain and off-chain, independently verifying the on-chain fund flow and the authenticity of underlying assets, avoiding blind trust in "authoritative endorsements."
Cryptocurrencies have a natural affinity for offshore structures, so the conflicting rules regarding trusts, funds, and crypto assets in various countries make cross-border accountability extremely costly. While global regulatory collaboration is a long-term challenge, Hong Kong must fulfill its regulatory responsibilities.
Sun was very clever this time, using the name of "protecting Hong Kong's financial reputation" to report the corruption of traditional trusts, publicly applying pressure to force Hong Kong regulators to intervene. He can also seek policy support for the Tron ecosystem, saving himself while protecting the market.
The closer you are to money, the more constraints are needed. #crypto regulation is an eternal topic, which also necessitates whistleblowers who dare to expose the industry's deep-seated issues.
Additionally, with the market not performing well, there is a pervasive sense of negativity, and many strange old rumors are surfacing, both true and false. Everyone should not be misled.
I hope that the next time I come to Hong Kong, it will be a thriving and orderly scene of compliance!
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