Odaily Planet Daily News Sun Yuchen released the "seven sins" of First Digital Trust (FDT), including:
The first sin: breach of trustee obligations
According to the Trustee Ordinance (Chapter 29), trustees must act with prudence, diligence and loyalty. Misappropriation of client funds has violated Article 4 (reasonable prudence) and basic trustee principles. FDT will bear liability for compensation and recovery obligations in civil proceedings.
The second sin: misuse of client funds
The Securities and Futures (Client Funds) Rules (Chapter 571) clearly stipulate that custodial funds shall not be used by the custodian for its own purposes. Client assets must be stored in isolation and unauthorized withdrawals are strictly prohibited. FDT transferred TUSD funds to ARIA DMCC without proper authorization and has faced intervention by law enforcement agencies, including fines, revocation of licenses, and even criminal prosecution.
The third sin: conducting regulated activities without a license
Although FDT is registered as a TCSP company, it does not hold any license issued by the Hong Kong Securities and Futures Commission to conduct regulated activities for clients. Its investment in TUSD assets, which it claims is related to ARIA, is a direct violation of the Securities and Futures Ordinance and is an unlicensed operation.
Fourth Crime: Fraud or Theft
Misappropriation of funds for the purpose of deceiving customers constitutes fraud or theft. FDT joined forces with accomplices such as ARIA CFF, Truecoin (Alex De Lorraine), Crossbridge/Finaport (Yai Sukonthabhund) to conceal the misappropriation and fabricate investments by falsifying records. This violates the Theft Ordinance (Chapter 210) and is a crime of obtaining property by deception or theft, which carries a maximum sentence of 7 years in prison and the return of illegal gains.
Fifth Crime: False Declaration or Concealment
To cover up misappropriation or unauthorized transactions, FDT provided false statements and fraudulent documents, claiming that TUSD funds were intact and had been invested as instructed. This violates Section 300 of the Securities and Futures Ordinance (using fraudulent or misleading means in securities transactions) and, if convicted, carries a maximum sentence of 14 years in prison.
The sixth crime: Violation of anti-money laundering obligations
FDT transferred illegally misappropriated funds through complex transactions or offshore accounts to conceal their sources, suspected of violating anti-money laundering regulations and may even constitute an act of assisting money laundering.
The seventh crime: Violation of the Prevention of Bribery Ordinance (POBO)
The Prevention of Bribery Ordinance is the core law in Hong Kong that regulates secret rebates. It expressly prohibits agents from receiving undisclosed benefits or commissions without the consent of the principal. FDT/Legacy, under the instructions of Vincent Chok, accepted secret rebates from DMCC, a private company in Dubai, in exchange for illegally misappropriating TUSD custodial funds.