Justin Sun Quietly Rescued TUSD After Fraud Rendered Nearly $500M in Reserves Illiquid, Court Docs Reveal
Hong Kong court filings have revealed that Justin Sun provided a financial lifeline to the TrueUSD (TUSD) stablecoin after nearly $456 million of its reserves became inaccessible due to unauthorized investments. The issuer, Techteryx, claims it was the victim of a “large-scale fraud” that compromised the stability of the stablecoin.
After acquiring TUSD from TrueCoin in December 2020, Techteryx appointed First Digital Trust (FDT) to oversee the reserves. However, according to legal documents prepared by U.S. law firm Cahill Gordon & Reindel, reserves meant for the Cayman Islands-based Aria Commodity Finance Fund (Aria CFF) were allegedly redirected without consent to a separate entity in Dubai—Aria Commodities DMCC.
Court documents accuse Matthew Brittain and his wife Cecilia of orchestrating the unauthorized transfers through intertwined Aria entities. FDT CEO Vincent Chok is also named in the filings, accused of funneling $15.5 million in undisclosed commissions and reclassifying unauthorized trade finance loans as fund investments.
The misappropriated funds were reportedly locked in illiquid projects, ranging from mining to maritime infrastructure, leaving Techteryx unable to redeem its investments. Attempts to recover the funds between 2022 and 2023 largely failed, pushing Techteryx to assume full control of TUSD in July 2023.
To maintain market confidence, Techteryx isolated 400 million TUSD and secured an emergency loan from Justin Sun to cover redemptions and ensure liquidity. The bailout allowed TUSD to continue operations despite its depleted reserves.
First Digital denies wrongdoing, stating it merely acted on instructions from Techteryx. Chok also raised concerns about the transparency of Techteryx’s ownership, echoing worries shared by Aria Group’s Brittain, who called the fraud accusations false and pointed to agreed-upon term commitments.
The ownership of Techteryx remains a topic of scrutiny. Court filings identify Li Jinmei as the beneficial owner, disputing earlier reports linking the entity to Jennifer Yiyang.
TUSD’s troubles were compounded by the collapse of its banking partner Prime Trust in 2023 and a subsequent $500,000 SEC settlement involving former owners TrueCoin and TrustToken over misleading claims about asset backing.
In hindsight, even Aria’s Matthew Brittain acknowledged the investment strategy was inappropriate for stablecoin reserves, stating that Aria CFF was never positioned as a highly liquid vehicle.
