Dubai Court Freezes $456 Million in Dispute Over Techteryx’s Funds

A Dubai court freezes $456 million linked to Justin Sun’s bailout of Techteryx, pending a Hong Kong court decision.

Allegations center around fraudulent misappropriation, with Techteryx claiming funds were mishandled by associated entities.

The freeze order aims to preserve assets until Hong Kong’s legal proceedings resolve ownership and accountability issues.

A Dubai court has issued a freeze order on $456 million linked to Justin Sun’s bailout of Techteryx, the issuer of the TrueUSD stablecoin. The Dubai Digital Economy Court’s decision follows allegations of breach of trust, with the funds being blocked to prevent their movement while Hong Kong courts determine ownership. The ruling is part of a larger legal dispute involving multiple parties, including Sun and entities tied to Techteryx’s operations.

Court Order Prevents Movement of Funds

Justice Michael Black of Dubai’s Digital Economy Court ruled to freeze the funds after finding substantial evidence of a breach of trust. The funds, transferred in six remittances, are connected to Techteryx’s dealings with First Digital Trust (FDT), Finaport Pte Ltd, and the Aria Fund. The freeze aims to ensure the funds remain intact until a Hong Kong court resolves ownership issues.

Justice Black emphasized the importance of maintaining the funds until the legal proceedings in Hong Kong, which involve claims of fraudulent misappropriation, are concluded. This action aims to prevent any potential movement or concealment of the assets during the litigation process. The freeze order is expected to remain in effect until the Hong Kong case reaches its conclusion.

Allegations of Fraudulent Misappropriation

Techteryx has filed a case in Hong Kong, claiming that FDT, Finaport, and the Aria entities were involved in misappropriating the $456 million. The funds were sent from FDT and Legacy Trust, both managed by Vincent Chok, to DMCC (Aria Fund and Aria DMCC). Techteryx has raised concerns over the lack of transparency in how the money was used or invested.

The company argues that the payments made to DMCC were part of a fraudulent conspiracy, particularly because they were not directed to the Aria Fund as expected. Furthermore, there are discrepancies in the documentation, with DMCC unable to show how the funds were spent. Aria DMCC’s managing director, Matthew Brittain, claimed the transfers were loans from FDT, though Techteryx disputes this explanation.

Dubai Court Justifies the Freeze

Justice Black outlined the reasoning for the freeze order, stating that it falls within the court’s inherent power to enforce foreign judgments. He explained that this freeze would aid in the potential enforcement of a future ruling from the Hong Kong court. The Dubai International Finance Centre (DIFC) Court also has jurisdiction to recognize and enforce foreign judgments, which further justifies the freeze.

Techteryx has indicated that it expects the wrongdoers in this case to be held accountable. The court’s decision to freeze the funds is seen as an effort to protect Techteryx’s interests and prevent any fraudulent transfers of assets while the dispute is resolved.