"Hong Kong stablecoin issuer First Digital seeks listing via US SPAC merger"

Hong Kong-based stablecoin issuer First Digital is reportedly seeking an initial public offering (IPO) through a merger with a U.S.-listed special purpose acquisition company (SPAC).

According to Bloomberg on the 1st (local time), First Digital Group is preparing to sign a non-binding letter of intent (LOI) to merge with the New York-listed SPAC 'CSLM Digital Asset Acquisition Corp III'. The matter remains private, and neither First Digital nor CSLM has issued an official statement.

First Digital issues the stablecoin FDUSD, which currently has a circulation of about $920 million. The company also manages the trustee and reserves for the stablecoin TUSD, which is operated by Techteryx, advised by Justin Sun.

However, First Digital Trust and Techteryx are engaged in a legal dispute over the handling of TUSD reserves. Justin Sun held a press conference last month requesting Hong Kong regulators' intervention, alleging that "First Digital moved reserves into illiquid assets." First Digital countered on X (formerly Twitter) on the 28th of last month, calling it "baseless allegations."

CSLM raised $230 million through a Nasdaq IPO in August. The merger talks are expected to include private investment in public equity (PIPE) involving outside investors, but specific terms are still being negotiated.