Justin Sun intervened to support Techteryx’s TrueUSD stablecoin after almost $500 million of its reserves became illiquid, as confirmed by sources familiar with the situation, and outlined in court documents from Hong Kong.
Techteryx took over TrueUSD from TrueCoin in December 2020, subsequently appointing First Digital Trust (FDT), a fiduciary located in Hong Kong, to oversee its stablecoin reserves.
According to legal documents prepared by a U.S. law firm, FDT was directed to invest these reserves in the Aria Commodity Finance Fund (Aria CFF), a registered entity in the Cayman Islands. However, court filings suggest that around $456 million was wrongly redirected to Aria Commodities DMCC, an unauthorized Dubai-based company.
The court filings reveal that Matthew Brittain oversees the Aria Commodity Finance Fund via Aria Capital Management Ltd, while Cecilia Brittain is named as the sole shareholder of the Dubai-based Aria Commodities DMCC.
However, communications from Matthew Brittan at Aria include a Dubai address.
Court documents state that Cecilia is Matthew’s spouse.
The operations of ARIA DMCC focus on trade finance, asset development, and commodity trading, while ARIA CFF provides financing for commodity traders, including ARIA DMCC and external parties, as explained by Matthew Brittain in an email.
Documents reveal that First Digital Trust managed $501 million of TrueUSD’s reserves by November 2024.
The court filings mention that an individual named Chok allegedly directed around $15.5 million in undisclosed commissions to an entity known as “Glass Door” and improperly structured roughly $15 million in unauthorized loans from FDT to Aria DMCC, later misrepresenting these as legitimate investments in what plaintiffs claim are fraudulent practices.
The claims assert that “the transfers to Aria DMCC constituted clear misappropriation and money laundering,” stating they occurred without the Plaintiff’s knowledge or consent.
As of the time of reporting, these allegations have yet to be adjudicated in court.
Aria DMCC invested resources in various global projects identified as relatively illiquid, such as manufacturing plants, mining operations, maritime vessels, port infrastructure, and renewable energy initiatives.
During attempts to redeem investments from Aria CFF between mid-2022 and early 2023, Techteryx reportedly received minimal or no reimbursements, with Aria entities allegedly failing to make payments and meet redemption requests, as noted in the court documents.
This led to Techteryx taking full operational control of TUSD in July 2023, effectively ending TrueCoin’s role in management. For a transitional period following the December 2020 acquisition, TrueCoin continued to manage TUSD’s daily operations.
The filings indicate that Sun stepped in at this juncture to offer emergency liquidity assistance, which was structured as a loan.
The Techteryx team subsequently quarantined $400 million in TUSD to maintain retail redemptions and protect token holders despite the issuer’s financial shortfall, as stated in the legal documents.
First Digital asserts adherence to Techteryx’s directives
In response to inquiries, Vincent Chok, the CEO of First Digital, firmly denied any allegations of misconduct or participation in improper activities.
Chok explained that First Digital Trust served strictly as a fiduciary intermediary, executing transactions in accordance with instructions from Techteryx and its representatives. He emphasized that his company bore no responsibility for independently vetting or advising on these investment choices.
“We understand that one of the primary obstacles raised by ARIA regarding early fund redemptions has been their AML/KYC concerns linked to the agreement between TrueCoin and Techteryx and the true identity of Techteryx’s ultimate beneficial owner,” Chok conveyed in an email, adding that he believed no parties involved consider Aria to be illiquid.
“We have yet to have the opportunity to fully defend ourselves,” Chok continued, expressing a commitment to clarify these issues as the legal proceedings progress.
Matthew Brittain of Aria Group firmly rejected Techteryx’s accusations against ARIA DMCC and related entities, stating, “numerous false claims were made during the court proceedings.”
He stated that Techteryx was fully informed of the terms, which were detailed in the contracts signed by investors in ARIA CFF as outlined in the Offering Memorandum.
Brittain agreed with Chok’s concerns regarding Techteryx’s beneficial ownership, referencing reports from media outlets on the subject.
The Hong Kong writ identifies Li Jinmei as the ultimate beneficial owner of Techteryx. A representative from Techteryx confirmed that this individual is different from Jennifer Yiyang, the previous beneficial owner, despite conflicting reports in the media.
“The subscriber has not addressed these issues,” Brittain stated, referring to ongoing questions about beneficial ownership.
Challenges compounded by the downfall of Prime Trust and regulatory scrutiny
Amid these developments, TrueUSD faced additional challenges from a collapsing banking partner and increasing regulatory scrutiny in the U.S.
In mid-2023, Prime Trust, an independent crypto custodian in Nevada with ties to TrueUSD for fiat transactions, was placed into receivership by state regulators.
Regulators alleged that Prime Trust had improperly utilized customer funds to satisfy withdrawal demands, raising severe concerns about its financial viability.
Legal documents from Nevada indicated that Prime Trust owed around $85 million in fiat obligations while having only about $3 million available.
This was not the final complication for the stablecoin issuer.
In September 2024, TrueCoin and TrustToken (previous owners of the stablecoin before Techteryx) reached a settlement with the SEC, resolving accusations of falsely marketing TrueUSD as fully dollar-backed while covertly investing reserves in high-risk offshore funds.
Neither party admitted wrongdoing or provided details of their offshore investments with Aria’s companies, but both agreed to pay civil penalties and return over $500,000 to settle fraud and unregistered securities offering charges.
Matthew Brittain of Aria criticized the initial decision to invest reserves in Aria, suggesting it was misguided for a stablecoin.
“ARIA CFF has never represented its strategy as highly liquid or suitable for a stablecoin’s reserves,” he stated in an email.