Sun Yuchen's 5-year rights protection faces a turning point! Dubai's freezing order enforces $456 million TUSD reserve funds, industry risk control sounds the alarm again

This is a five-year, hundreds-of-millions-of-dollars fund recovery battle that has finally seen a glimmer of hope. Recently, the DIFC Courts (Dubai International Financial Centre Courts) issued their first global freezing order, prohibiting the involved company from disposing of, transferring, or reducing assets worth $456 million. This marks the official transition of the TUSD reserve misappropriation case into the judicial accountability stage. TRON founder Justin Sun, as a key advocate in this rights protection effort, held a press conference in Hong Kong to detail the case progress and provided an in-depth analysis of the risk control flaws in the crypto industry.

From Concealment to Exposure, Justin Sun Unveils the Truth Behind TUSD Reserve Transfers

The trouble with TUSD began at the end of 2020. At that time, after Techteryx acquired this stablecoin from TrueCoin LLC, the operation rights were entrusted to the latter to manage the reserves. TrueCoin then handed over over $500 million in TUSD reserves to the trust company First Digital Trust (FDT) for safekeeping, using the offshore fund ACFF as an investment vehicle. Everything seemed normal, but undercurrents were brewing.

It wasn’t until July 2023, when Techteryx took over TUSD’s offshore operations, that the “carefully packaged” scam was uncovered. FDT failed to pay investment interest, triggering an emergency investigation — which revealed that the trust company had unauthorizedly transferred at least $456 million in reserves to Dubai-based Aria Commodities DMCC instead of the originally planned Cayman Islands fund.

Even more shocking, the flow of these funds became murky. According to court documents provided by DIFC Courts, Aria DMCC transferred these funds through six remittances into a series of high-risk projects: UAE asphalt manufacturing facilities, African coal mine rights, bulk commodity projects in the US and Ukraine, Australian ports, and renewable energy. More absurdly, the involved personnel forged new fund subscription documents, disguising this $456 million as related-party loans, attempting to create a false impression that the assets had been repaid.

Justin Sun pointed out at the press conference that the masterminds behind this case include FDT and the actual controllers of Aria DMCC. According to disclosures, FDT in Hong Kong requested that assets be transferred to Aria DMCC’s private accounts rather than regulated Cayman funds, aiming to expedite the collection of secret kickbacks of up to $15 million — this was no longer simple negligence but blatant joint criminal conduct.

A Carefully Designed Cross-Border Scam: How $456 Million Was Layered and Transferred

From the source, the success of this scam relied on systemic loopholes. Sun analysis indicates that the root cause lies in the systemic flaws exposed during custody: the reserve assets and investment assets were not strictly segregated; high-risk investments were packaged as low-risk instruments; funds could be easily transferred into unqualified private entities.

Crucially, many institutions have compliance and risk control departments, but these are often ineffective. Key internal mechanisms lacked proper checks and balances; a few individuals could collude to forge documents, make false statements, and secretly receive kickbacks, resulting in client funds being “stolen” directly.

The complexity was further increased by multi-layer offshore structures. This incident involved jurisdictions such as Dubai, Hong Kong, the Cayman Islands, the US, Australia, and the UK. The complex cross-border framework greatly reduced transparency and accountability. Routine audits struggled to penetrate this fog, providing a natural safe haven for criminals to transfer funds and launder money.

In September 2024, the US SEC finally took action. The regulator accused TrueCoin and TrustToken of engaging in unregistered investment contract transactions and misleading investors by claiming TUSD was 100% backed by USD, when in fact 99% of reserves were invested in high-risk offshore funds. Although both companies neither admitted nor denied the charges, they ultimately paid civil fines totaling over $160,000 in settlement.

After years of investigation, in April 2025, Justin Sun publicly stated that TrueCoin was suspected of colluding with FDT and other institutions, and announced a $50 million bounty program to solicit clues. This statement triggered a strong backlash from FDT, which not only denied the allegations but also threatened to sue Justin Sun for defamation. But facts speak louder than words — in the same month, DIFC Court ultimately extended the global freeze order against Aria DMCC.

Justin Sun’s “Prescription”: How to Repair Industry Risk Control Flaws

Currently, TUSD has a circulating market cap of about $494 million, with over 494 million tokens in circulation. Confidence in the stablecoin ecosystem is gradually being restored. Sun not only provided Techteryx with $500 million in financial support but also summarized industry-wide governance solutions from this case.

First is On-Chain Transparent Disclosure. The crypto industry should fully leverage blockchain technology to achieve real-time on-chain disclosure of transactions, transfers, and information, preventing similar risks from the source. Every large fund movement should be traceable and verifiable.

Second is Enhanced Auditing and Public Disclosure. Regulators should strengthen periodic audits of trust companies’ fund management and regularly publish asset information for public review. Transparency itself is the best anti-corruption measure. Meanwhile, institutions holding trust licenses must report large fund movements to regulators promptly, ensuring key processes are traceable.

Third is Post-Event Accountability Mechanism. Executives and relevant personnel must bear personal joint and criminal liabilities, rather than hiding behind the company. The illegal transfer of funds driven by secret kickbacks in this case constitutes joint criminal conduct and must be dealt with severely.

Finally, and most critically, is Global Regulatory Cooperation. A penetrating cross-border regulatory mechanism should be established to track illegal fund flows and money laundering activities. Countries need to set up dedicated digital asset courts to support global freezing and recovery of victim funds, preventing wrongdoers from exploiting jurisdictional loopholes to transfer illicit gains.

Justin Sun emphasized that this global freeze order from DIFC is a milestone in the judicial protection of crypto assets. It not only helps trace cross-border scams and illegal fund flows but also provides a textbook case for regulators worldwide. He hopes that, through this precedent involving TUSD, more judicial and auditing agencies globally will cooperate to combat international crime and money laundering activities.

For users, the good news is that the risks associated with TUSD are gradually being eliminated. Thanks to the proactive actions of Justin Sun and Techteryx, this stablecoin is more robust than ever, with improved safeguards ensuring all circulating TUSD is backed by sufficient reserves and further strengthened by compliance management. This five-year rights protection battle will ultimately serve as a catalyst for advancing risk control in the entire industry.