Justin Sun, founder of Tron, provided an emergency loan to stabilize the TrueUSD (TUSD) stablecoin after a serious liquidity crisis.
TrueUSD Liquidity Crisis
In December 2020, Techteryx acquired TrueUSD and entrusted the reserves to First Digital Trust (FDT), a Hong Kong fiduciary. However, court documents reveal that FDT directed $456 million of TUSD assets into Aria Commodities DMCC, a Dubai-based company, causing major liquidity issues.
Justin Sun's Actions
In mid-2023, as the liquidity crisis deepened, Techteryx turned to Justin Sun for help. The Tron founder provided emergency funding in the form of a loan to stabilize the situation and ensure retail redemptions could continue. This allowed for the isolation of $400 million in troubled reserves from everyday operations.
Defense by Participants
FDT's CEO, Vincent Chok, defended his company's actions, claiming that FDT acted within its fiduciary capacity. Meanwhile, Matthew Brittain, controlling Aria CFF, dismissed the allegations, stating all dealings were transparent and compliant.
The TrueUSD case underscores the importance of proper reserve management for stablecoins and how unexpected changes can significantly impact the market.
