What You Need to Know

• Court filings from Techteryx reveal that TrueUSD had a $456 million gap in its finances from 2023 onwards due to its reserves being tied up in unredeemable investments.
• These investments mainly pertain to illiquid loans aimed at resource projects in developing regions.
• While Justin Sun publicly distanced himself from TrueUSD, he played a key role in financing the stablecoin to regain user trust amidst financial difficulties.

Justin Sun assisted Techteryx with its TrueUSD stablecoin after it reported that nearly half a billion dollars of its reserves became illiquid, as confirmed by sources familiar with the situation. Techteryx disclosed these details in recent court documents filed in Hong Kong.

Justin Sun at Consensus Hong Kong

Overview of the Situation

According to the findings from court documents and prepared by the U.S. law firm Cahill Gordon & Reindel, the investments were diverted into unauthorized entities without proper oversight.

Court documents also highlight the involvement of Matthew Brittain and Cecilia Brittain in managing the misallocated funds. They were purportedly linked to both the funds and the entities in which TrueUSD’s reserves were improperly invested.

Further complicating the issue, the collapse of related financial entities and heightened regulatory scrutiny led to significant challenges for the stablecoin’s operations.

In response to the liquidity crisis, Techteryx took full control of TrueUSD in July 2023 after terminating its relationship with TrueCoin, seeking to stabilize the currency while facing numerous allegations of mismanagement and fraud.