Crypto boss lent US$460m to Techteryx, accuses First Digital Trust of insolvency

Chinese cryptocurrency entrepreneur Justin Sun Yuchen said that he had lent around US$460 million (HK$3.6 billion) to help Techteryx, the investment firm behind the stablecoin TrueUSD, replenish its reserves and prevent its collapse.

Techteryx filed a lawsuit with Hong Kong’s High Court late last month, accusing First Digital Trust chief executive Vincent Chok and Singapore-licensed fund manager Yai Sukonthabhund of conspiring with multiple companies to fraudulently obtain more than US$500 million in trust deposits.
 
Techteryx acquired the TrueUSD business from TrueCoin in December 2020, drawn by its partnership with a Hong Kong trust firm, according to the filing.

Techteryx entrusted TrueCoin to continue operating TUSD and followed its advice to deposit US$500 million in reserves with FDT. However, it later discovered the funds had been invested in the Aria Commodity Finance Fund, a Cayman Islands mutual fund, according to a court filing.

Sun said on Thursday via X that FDT is effectively insolvent and unable to fulfill its clients’ redemption requests, advising users to take immediate action to protect their assets.

Sun condemned fraudsters for exploiting Hong Kong’s reputation as a global financial center and urged authorities to tighten regulations.

He questioned how large sums could be transferred overseas without proper authorization, warning that such loopholes must be addressed by the government, banks, and regulators.

Sun also stressed that Techteryx is not one of his affiliated companies, saying: “I am the one stepping in to save everyone.”

Asked why he stepped in as a “white knight,” Sun explained that with 5 million global users of TrueUSD, any failure to redeem the stablecoin for cash could trigger a financial crisis.

STAFF REPORTER