tl;dr
Tron founder Justin Sun intervened to stabilize TrueUSD (TUSD) stablecoin after its reserves faced a significant liquidity crisis. Recent court filings suggest that Techteryx, the owner of TrueUSD, faced liquidity issues when its reserves were directed to Aria Commodities DMCC in Dubai instead of th...
Tron founder Justin Sun intervened to stabilize TrueUSD (TUSD) stablecoin after its reserves faced a significant liquidity crisis despite publicly distancing himself, according to recent Hong Kong court filings. Techteryx, which acquired TrueUSD in December 2020, entrusted First Digital Trust (FDT), a fiduciary based in Hong Kong, with managing TUSD’s reserves.
However, court documents reveal that instead of adhering to the agreed-upon structure, FDT allegedly directed $456 million of the stablecoin’s assets into Aria Commodities DMCC, a separate entity based in Dubai. This entity was not part of the original investment strategy, leading to severe liquidity issues for Techteryx, which struggled to recover its investments when it attempted redemptions between mid-2022 and early 2023.
Court documents outline that Techteryx faced repeated defaults and missed payments from the Aria entities, which left the stablecoin’s reserves at risk. The firm claims that these actions were misrepresentations and alleged that the funds were misappropriated, adding that the investments did not reflect Techteryx’s intentions.
Matthew Brittain, who happens to be the controlling figure behind Aria CFF through Aria Capital Management, and his wife, Cecilia Brittain, who holds sole ownership of Aria Commodities DMCC, have come under scrutiny. Despite the apparent separation of the two companies, court filings suggest that the entities were closely connected. Matthew Brittain even allegedly acknowledged the financial ties between the two.
As the liquidity crunch deepened in mid-2023, Techteryx turned to Justin Sun for help. The Tron founder provided emergency funding, structured as a loan, to stabilize the situation and ensure that retail redemptions could continue. This financial intervention helped Techteryx to quarantine $400 million of TUSD, effectively isolating the troubled reserves from affecting everyday users. An earlier announcement revealed that Techteryx assumed full control of TUSD in July 2023, thereby ending TrueCoin’s role in the stablecoin’s operations.
Meanwhile, FDT’s CEO, Vincent Chok, defended his company’s actions and claimed that FDT had merely acted in its fiduciary capacity. On the other hand, Matthew Brittain dismissed the accusations while asserting that all dealings were transparent and in compliance with the agreed terms.
Last January, TUSD experienced a deviation from its $1 parity, which was attributed to sell-offs caused by whales. Reports also suggested that Binance is excluding the stablecoin from the list of cryptocurrencies eligible for staking to earn MANTA.