Blitz Bureau
NEW DELHI: A Dubai court has frozen more than $456 million in assets worldwide in what is believed to be the first case involving the alleged diversion of funds meant to back a cryptocurrency ‘stablecoin’.
In a landmark decision made public recently, the Dubai International Financial Centre’s (DIFC) Digital Economy Court issued an indefinite worldwide freezing order against Dubai-registered Aria Commodities DMCC and any banks or entities holding the disputed funds or assets purchased with them, according to Khaleej Times.
The order signed by Justice Michael Black, prevents the $456 million and any proceeds linked to it from being moved or concealed anywhere in the world. It is the DIFC Court’s first global freeze in a cryptocurrency-related matter and carries penalties, including fines or imprisonment, for anyone who breaches it.
The case revolves around TrueUSD (TUSD), a stablecoin designed to maintain a fixed value of one US dollar. To do that, every TUSD in circulation must be backed by real dollars held in reserve.
According to court filings between 2021 and 2022, nearly half a billion dollars was removed from these reserves and channelled into private investments, including commodity trading and mining projects. The transfers were allegedly carried out using forged instructions and falsified documents. Techteryx Ltd, the owner of TrueUSD and controlled by Chinese cryptocurrency entrepreneur Justin Sun, said the shortfall was discovered during audits earlier this year. Sun, 35, founded the TRON blockchain platform in 2017 and has remained a high-profile figure in global crypto markets. He has previously faced US regulatory scrutiny but continues to be active in the sector.
To ensure that TUSD holders were not affected, Techteryx said it injected hundreds of millions of dollars in fresh funds so that every token remained fully redeemable at one US dollar. The company maintains that no member of the public has suffered losses as a result of the alleged diversion. Techteryx has since initiated legal proceedings in several jurisdictions, including Hong Kong and the Cayman Islands. In Dubai, it requested a freeze to prevent the funds from disappearing.
