TrueUSD Archives | Protos https://protos.com/tag/trueusd/ Informed crypto news Wed, 25 Sep 2024 10:53:57 +0000 en-US hourly 1 https://wordpress.org/?v=6.2.6 https://protos-media.s3.eu-west-2.amazonaws.com/wp-content/uploads/2022/01/30110137/cropped-protos-favicon-32x32.png TrueUSD Archives | Protos https://protos.com/tag/trueusd/ 32 32 TrueUSD firms dodge fraud claims with SEC settlement https://protos.com/trueusd-firms-dodge-fraud-claims-with-sec-settlement/ Wed, 25 Sep 2024 09:27:27 +0000 https://protos.com/?p=75807 TrueCoin and TrustToken have settled SEC charges of misrepresenting TrueUSD as 1:1 backed after funds were sent to a speculative, risky fund.

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TrustToken and TrueCoin have reached a $700,000 settlement with the US Securities and Exchange Commission (SEC) after being accused of defrauding investors of stablecoin TrueUSD (TUSD).

The SEC’s complaint, filed on Tuesday, alleges that the firms sent TUSD’s dollar backing to “a speculative and risky offshore commodity fund” and that after TrueUSD was acquired by Techteryx in late 2020, TrueCoin remained involved in the stablecoin’s operations until July 2023. During that period, the SEC believes the firms continued to insist that TUSD was backed “one-for-one by US dollars.”

This settlement does not include TrueCoin and TrustToken admitting or denying the allegations contained in the complaint.

Read more: What’s up with TrueUSD and the rest of TrustToken’s stablecoins?

“By the fall of 2022, TrueCoin and TrustToken became aware of redemption problems at the commodity fund,” the complaint continues. Despite allegedly becoming aware of these issues, the firms continued to represent TUSD as “backed dollar-for-dollar.”

Additionally, TrueCoin is said to have received “a portion of the interest earned on the TUSD reserves” from Techteryx.

This fund was apparently investing in a Hong Kong trust, which invested in “trade finance, structured trade, export finance, import finance, supply chain financing, and project financing of entities.” Allegedly, a memorandum for this fund included a note that it was “speculative” and stated that it was only suitable for those who could “bear the risk of losing most or all of their investment.”

By September 2024, “more than 99% of the assets backing TUSD were invested in the risky Commodity Fund.” The fund appears to be provided by First Digital Trust in Hong Kong, a long-time TrueUSD partner.

Read more: TrueUSD bank FlowBank forced into bankruptcy

Funds held at First Digital Trust are currently described in the attestations for TrueUSD as invested “in other instruments to generate yield, which are made up of investments that may not be readily convertible to cash, subject to market conditions or fund performance.”

  • First Digital offers its own stablecoin, First Digital USD (FDUSD), which claims to be “a 1:1 USD-backed stablecoin.”
  • The complaint also cites TrueFi (a not-really-DeFi lending market where investors could lend TUSD) as evidence that TUSD was offered and sold as a security.
  • Alameda Research was one of the lead investors in the TRU token, which had some utility in TrueFi.

As part of the settlement with the SEC, TrueCoin and TrustToken have agreed to $163,766 in civil penalties each. TrueCoin has also agreed to $340,930 disgorgement with a prejudgement interest of $31,538.

Got a tip? Send us an email or ProtonMail. For more informed news, follow us on XInstagramBluesky, and Google News, or subscribe to our YouTube channel. Quotes in bold are our emphasis.

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TrueUSD bank FlowBank forced into bankruptcy https://protos.com/trueusd-bank-flowbank-forced-into-bankruptcy/ Thu, 13 Jun 2024 16:49:02 +0000 https://protos.com/?p=68230 FINMA claims that FlowBank "no longer has sufficient capital for its operations as a bank" and says it's worried the bank is "over-indebted."

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FlowBank, a Swiss bank that has historically been friendly to crypto firms, has been forced into bankruptcy by FINMA, the Swiss Financial Market Supervisory Authority.

The press release issued by FINMA claims that FlowBank “no longer has sufficient capital for its operations as a bank” and further claims that it’s worried that the bank is “over-indebted.”

Furthermore, the regulators are concerned that the “bank entered into numerous higher-risk business relationships and processed large transactions without properly investigating.”

FINMA previously ordered the bank’s license to be withdrawn, but that ruling has been held up during appeal

The press release also notes that it intends to “repay deposits up to CHF 100,000” out of the bank’s remaining assets.

TrueUSD

Among the businesses that FlowBank was involved in was TrueUSD, a controversial stablecoin with links to crypto entrepreneur Justin Sun. 

Sun has admitted he was a partner market maker for this stablecoin, but others have alleged that he owns or at least tried to purchase it. 

TrueUSD used to disclose that FlowBank was where it stored a significant portion of its assets but eventually stopped these disclosures. As of today, its attestations still describe a ‘Swiss Depository Institution’ where funds are held.

Read more: TrueUSD attestations paused again, this time for improper ‘balances’

This attestation also gives us some insight into the roughly $503 million in assets supposedly backing this stablecoin. The vast majority of this is currently held at First Digital Trust in Hong Kong, with only ~$1.1 million currently held at the other depository institutions.

Protos has reached out to TrueUSD to determine how this bankruptcy will affect its operations, but at time of publication, it has yet to respond. 

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Justin Sun affiliated TrueUSD market cap collapses 50% in 7 days https://protos.com/justin-sun-affiliated-trueusd-market-cap-collapses-50-in-7-days/ Fri, 22 Mar 2024 16:34:35 +0000 https://protos.com/?p=63303 This dramatic fall in the market cap of TrueUSD follows Binance's delisting of several TrueUSD pairs on March 15.

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TrueUSD, the dollar-pegged stablecoin affiliated with Justin Sun, has seen its market cap collapse more than 50% from $1.29 billion on March 15 to $615 million on March 22, according to data from CoinMarketCap. 

This mass redemption of TrueUSD follows Binance’s delisting of several TrueUSD pairs on March 15. TrueUSD spent much of February struggling to maintain its peg, falling as low as $0.95.

TrueUSD’s market cap has collapsed from $1.29 billion to $615 million during March.

A review of the attestations provided by TrueUSD also seem to show that it no longer has United States treasury bills in its reserves. The remaining funds are split between approximately $200 million held “at a Hong Kong depository institution, a Swiss depository institution, and Bahamian depository institutions” and approximately $500 million held at First Digital Trust Limited.

First Digital Trust has also launched its own stablecoin, FDUSD, which has seen its own market cap fall from approximately $3 billion to $2.6 billion since March 15. Again, this is according to data from CoinMarketCap. 

Read more: TrueUSD attestations paused again, this time for improper ‘balances’

This contraction hasn’t affected the entire stablecoin market equally. Tether has seen its market cap grow by approximately $700 million since March 15.

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TrueUSD attestations paused again, this time for improper ‘balances’ https://protos.com/trueusd-attestations-paused-again-this-time-for-improper-balances/ Wed, 10 Jan 2024 16:38:31 +0000 https://protos.com/?p=57841 TrueUSD, a dollar-pegged stablecoin connected to Justin Sun, have paused its attestations, citing a 'balances' issue.

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TrueUSD, a dollar-pegged stablecoin connected to Justin Sun, has its real-time attestations from The Network Firm paused at press time, with the ‘balances’ Ripcord active. 

The attestation system describes the ‘balances’ ripcord: “During the last reporting interval, the LedgerLens System received responses, errors, or non-responses from third-party systems or accounts resulting in the sum total of liabilities being greater than the sum total of the relevant assets.”

It continues, “Commonly, over the historical operation of the System, the Balances ripcord is triggered by temporary imbalances seen in normal operations (such as funds in transit, or Management opening a new bank account not yet integrated into the System). However, the Balances ripcord can also be triggered due to an actual imbalance of liabilities and corresponding assets.

“Such a condition starts an inquiry with Management by the Attestation Provider. In all cases, the Balances ripcord expires after 72 hours; if the imbalances exist after 72 hours, and no other ripcords are triggered, the System will generate a new attestation report showing the point in time balances obtained by the System.” 

Read more: TrueUSD was hacked and issued fake tokens

TrueUSD responded to Protos to note that the ‘Balances’ ripcord “was accidentally triggered by reserve fund movements between banks and it has been fixed.”

TrueUSD attestations have had a warning for several months. “Our examination disclosed that on April 21, 2023, the agent of Techteryx opened a conventional corporate account with a Swiss depository institution with terms within the account’s ‘General Terms and Conditions’ (“Terms”) that do not explicitly specify that the related funds are escrowed on behalf of TUSD token holders or that Techteryx and the agents are not entitled to any funds at any time and no amounts deposited into the accounts shall become the property of Techteryx, the agents, or any other entity, or be subject to any debts, liens or encumbrances of any kind of Techteryx, the agents, or any other entity.

“Techteryx and its agents began utilizing the account starting on June 13th, 2023, which maintained balances contributing to the total USD Denominated Collateral held in Accounts within the TrueUSD Holdings Report. Techteryx and it’s agents have initiated deliberations with the Swiss depository institution to modify the account’s Terms to explicitly adhere to the Notes to the TrueUSD Holdings Report.”

Despite the many months since this warning was introduced it is still present, suggesting Techteryx has been unsuccessful in its “deliberations with the Swiss depository institution to modify the account’s Terms.” TrueUSD told Protos that “the Custody Agreement has been under legal review process by the Swiss bank which is beyond our direct control.”

Additionally, the attestations warn that “In Note 2 to the TrueUSD Holdings Report, “Other Instruments” are included in the subject matter of this report. Other Instruments refers to subscriptions by the Hong Kong Depository Institution in a single Fund, held in trust accounts for benefit of token holders, with capital invested by the Fund Manager.

“The share classes held within the fund mature at various future dates and per the Fund Manager’s prospectus, are reported at cost. Our examination does not include an examination over the fair market value of the investments with the Fund Manager, and is limited to the reported cost in the Notes to the TrueUSD Holdings Report.”

Despite these issues, TrueUSD have recently encouraged users to explore their “achievements in multi-chain adoption, security advancements, user-centric upgrades, and more!” Interestingly, despite the insistence that it has made ‘security advancements’ recently, TrueUSD appeared to have its deployer address compromised, as well as user information was also compromised. 

Protos has reached out to TrueUSD to attempt to gain additional information about why the attestations are paused. We will update this piece if we hear back.

Update January 11th, 15:06 UTC: The article was updated to add comment from TrueUSD.

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TrueUSD was hacked and issued fake tokens https://protos.com/trueusd-was-hacked-and-issued-fake-tokens/ Mon, 23 Oct 2023 17:15:11 +0000 https://protos.com/?p=50513 TrueUSD disclosed a hack of key customer information at about the same time as it had to disclaim tokens issued by deployers.

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Recently, the team behind TrueUSD was forced to disclaim TEURO — a token deployed at the same address — suggesting that private keys historically associated with its TUSD token have been compromised.

Funds related to this false token have also been tied to the deployment of TCNY, another apparently fake token unaffiliated with the ‘real’ TrueTokens. This comes as TrueUSD has had to disclose a hack of customer information.

This token was deployed by address 0x7bA7EF06A2621267f063eF2DB2d482D5B507D8b3, which does correspond to the address that originally deployed the TUSD contracts. However, TrueUSD now claims that this address “has NO permissions over TUSD smart contracts; it was exclusively designated for token deployment.”

The company also claims, “It holds NO authority over current TUSD contracts or user token assets and has NO impact on TUSD’s operations. This address is NOT owned or controlled by the TUSD team, and there is NO affiliation between the TUSD team and this address.”

The firm concludes, “Since the end of 2020, the TUSD team has gained ownership of the TUSD contract. Rest assured, your TUSD tokens are secured by our smart contracts, which are securely owned and managed by the TUSD team. Once again, the security of TUSD remains our top priority.”

This statement, in some sense, appears to contradict a previous claim from Monica Ho of Archblock to Protos, where she discussed how, for TrueUSD, “the private keys have been handed over to the Techteryx engineering team.” 

Independent crypto researcher ZachXBT tracked fund movements related to the deployment of TEURO, noting that one of the addresses that received TEURO bridged funds over to Arbitrum before bringing them back to Ethereum. The original TrueAUD deployer then created another fake token in TrueCNY.

Further complicating this story is the fact that TrueUSD recently had to disclose that it was compromised, tweeting, “TUSD team was informed by TrueCoin that they received a third-party vendor’s notification that the vendor’s Security Team detected ‘an anomalous’ account chance within [TrueCoin’s] organization made by a compromised support vendor.'” 

Blockchain intelligence firm ChainArgos highlighted how this represents a potentially larger attack on TrueUSD. It highlighted that TUSD allows for more ‘automated’ minting and redemption by users than many other stablecoins, potentially allowing hackers to quickly obtain funds related to the stablecoin. 

ChainArgos says a potential attack relies on the hacker being able to mint more TUSD into accounts and transfer them to the stUSDT mint address. That account was able to burn those TUSD, potentially redeeming those tokens and accessing those funds.

Read more: FTX knew Justin Sun tried to acquire TrueUSD

These transfers all happened before the disclosed hack date and rely on loss of control of keys, which so far hasn’t been disclosed. This means that these transfers could be related to non-hack activity by Justin Sun.

Protos has previously reported that stUSDT is almost entirely controlled via entities and addresses believed to be owned or controlled by Sun

Protos has reached out to TrueUSD with a series of questions to clarify the nature of this hack.

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FTX knew Justin Sun tried to acquire TrueUSD https://protos.com/ftx-knew-justin-sun-tried-to-acquire-trueusd/ Tue, 25 Jul 2023 17:12:17 +0000 https://protos.com/?p=42565 One of FTX's general counsels was involved in an attempted acquisition of TrueUSD by Tron and Justin Sun, according to a lawsuit.

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Former TrustLabs CEO Daniel Jaiyong An has filed a pro se lawsuit against Archblock that includes details about a Tron acquisition of TrueUSD that he had a part in negotiating. 

Jonathan Reiter, the chief exec of blockchain analytics firm ChainArgos, highlighted that one of the people involved in that negotiation was Can Sun. Sun was apparently representing Tron during the attempted acquisition, with An stating in the lawsuit: “Unfortunately, as I finalized negotiations between Justin Sun, Tron, and Can Sun (who was representing Tron as legal counsel), the vote out occurred.”

The Can Sun involved is almost certainly the same one that had previously worked at Fenwick & West at the same time as Daniel Friedberg, the eventual general counsel and chief regulatory officer for FTX.

Friedberg began working with FTX while still employed at Fenwick, setting up West Realm Shires in February 2020. Crucially, An’s lawsuit noted that negotiations between Tron and TrustToken were ongoing in January 2020.

Fenwick also represented BitTorrent in its acquisition by Tron.

After leaving Fenwick, Sun worked as general counsel for FTX until the company declared bankruptcy in November 2022. 

FTX’s sister firm Alameda Research was also an important counterparty for TrueUSD. ChainArgos analysis suggests that it was the largest single burner of TrueUSD and was a lead investor in the TRU token, which is used to govern TrueFi.

It eventually defaulted on a series of loans that were extended to it through TrueFi and managed by TrueTrading, a wholly-owned subsidiary of Archblock.

To summarize, Fenwick lawyer and future FTX general counsel Friedberg was working with FTX to setup entities such as West Realm Shires that were essential to the alleged fraud. At the same time, future FTX general counsel Can Sun was helping negotiate the purchase of TrueUSD by Justin Sun and Tron.

Alameda Research was also one of the most important issuers and redeemers of TrueUSD. Similarly, it’s been important for other stablecoins, serving as the largest issuer of Tether on Tron.

Read more: Tether Papers: This is exactly who acquired 70% of all USDT ever issued

Assuming Jaiyong An’s description of the negotiations is accurate, then FTX employed people who were aware of this attempted acquisition of TrueUSD, which was represented in public as having no involvement of Justin Sun.

Despite knowing Justin Sun had tried to acquire it, FTX was still willing to include TrueUSD in its stablecoin basket, and Alameda Research was willing to continue to serve as one of its most important issuers and redeemers.

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Former Archblock CEO Daniel Jaiyong An is suing Archblock https://protos.com/former-archblock-ceo-daniel-jaiyong-an-is-suing-archblock/ Fri, 21 Jul 2023 12:02:04 +0000 https://protos.com/?p=42284 Daniel Jaiyong An's lawsuit suggests Archblock directors were unwilling to fulfil their fiduciary duties to shareholders.

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Former TrustLabs (now known as Archblock) CEO Daniel Jaiyong An is suing the company he once helped run for fraud and tricking him out of millions of dollars in equity. However, the lawsuit isn’t as simple as it appears on the surface.

To start, Jaiyong An is filing the lawsuit pro se — meaning that he’ll be representing himself in court, likely because he can’t afford or find an attorney to represent him. While it’s possible to win a case this way, it’s a rarity and suggests that no attorney believed he’d be able to succeed.

Additionally, it’s worth pointing out that Jaiyong An is being sued by his former employer, which is asserting claims under the Computer Fraud and Abuse Act and the Stored Communications Act and suggests that he deleted entire Slacks and other important data when he was asked to resign as CEO. The lawsuit has been ongoing since early 2021.

Meanwhile, the claims in the most recent lawsuit are extraordinary, scattered, and worth nearly a hundred million dollars, according to Jaiyong An — again, suggesting that the case is weak, considering many lawyers would accept the case and a large chunk of the winnings if they thought it stood a chance.

Jaiyong An’s lawsuit includes some incendiary claims

Archblock was the initial creator of the Trust Token system, which is now a suite of stablecoins, including the infamous TUSD, and a lending protocol that is controlled by Techteryx — an Asian consortium representing Justin Sun. Since Jaiyong An’s resignation, almost everything created by Archblock has been sold to Justin Sun-related entities.

Jaiyong An attempts to paint a picture of executive leadership and board of directors unwilling to take on their fiduciary duties to shareholders and states that they specifically took the company in a direction that shareholders hadn’t agreed to. To back up these claims, Jaiyong An includes a chat with Justin Sun where he appears to tell the crypto billionaire that the way he intends to run Archblock isn’t feasible.

Read more: What’s up with TrueUSD and the rest of TrustToken’s stablecoins?

Strangely, the lawsuit also makes mention of a supposed 2016 rape of “an Asian woman” by the current CEO, Rafael Cosman, and numerous other improprieties, including, but not limited to, “gagg[ing] and urinat[ing]” on a woman, “ingesting a Schedule 1 illegal drug” on the Google campus, and “sleeping” and “ingesting illegal substances” at Palantir.

While many of the claims within the lawsuit are incendiary bombshells, there’s no evidence to back them up and few of them actually seem related to the assertions made in the lawsuit.

Lastly, the initial lawsuit by TrustLabs filed against Jaiyong An is set to go to trial relatively soon. Protos will update this story if and when that comes to a conclusion.

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Scoop: TrueUSD pauses attestations amid Prime Trust issues https://protos.com/scoop-trueusd-pauses-attestations-amid-prime-trust-issues/ Tue, 20 Jun 2023 16:40:19 +0000 https://protos.com/?p=40104 The real-time attestations for TrueUSD have again been paused, citing issues with balances preventing the attestation from being generated.

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The automated attestations for TrueUSD are currently paused, citing a balances issue. Provided by The Network Firm for TrueUSD, the system includes a ‘ripcord’ feature that notifies users if there is a problem that could affect the ability to generate attestations.

Currently, the ‘Balances’ ripcord is active, which according to Archblock means: “During the last reporting interval, the LedgerLens system received responses, errors, or non-responses from third-party systems or accounts resulting in the sum total of liabilities being greater than the sum total of the relevant assets.

Screenshot of the TrueUSD ripcord from Archblock’s website.

“Commonly, over the historical operation of the system, the Balances ripcord is triggered by temporary imbalances seen in normal operations (such as funds in transit, or management opening a new bank account not yet integrated into the system). However, the Balances ripcord can also be triggered due to an actual imbalance of liabilities and corresponding assets.

“Such a condition starts an inquiry with management by the attestation provider. In all cases, the Balances ripcord expires after 72 hours; if the imbalances exist after 72 hours, and no other ripcords are triggered, the system will generate a new attest report showing the point in time balances obtained by the system.”

The real-time attestations for TrueUSD were previously provided by Armamino LLP before it exited the cryptocurrency ecosystem. The Network Firm was founded by former Armamino auditors.

This “Balances” ripcord comes one week after the “Management” ripcord was active for TrueUSD, which Archblocks said to Protos was “a technical issue caused by a test minting by our new banking partner.”

Read more: Control of TrueUSD private keys transferred to Techteryx

TrueUSD has had to pause Prime Trust-related redemptions and minting, while Prime Trust has reportedly agreed in principle to an acquisition by BitGo. TrueUSD has communicated that other redemption and minting avenues remain.

In its most recent attestations, TrueUSD says that funds are held at:

  • Federally-insured US depository institutions.
  • A Hong Kong depository institution (previously First Digital Trust though no longer disclosed).
  • A Bahamian depository institution (previously Capital Union Bank though no longer disclosed).
  • A Swiss depository institution.

The Network Firm also recently added a note to the attestation which says that, “Our examination disclosed that on April 21, 2023, the agent of Techteryx opened a conventional corporate account with a Swiss depository institution with terms within the account’s ‘General Terms and Conditions’ that do not explicitly specify that the related funds are escrowed on behalf of TUSD token holders or that Techteryx and the agents are not entitled to any funds at any time and no amounts deposited into the accounts shall become the property of Techteryx, the agents, or any other entity, or be subject to any debts, liens or encumbrances of any kind of Techteryx, the agents, or any other entity.

“Techteryx and its agents began utilizing the account on June 13, 2023, which maintained balances contributing to the total USD Denominated Collateral held in Accounts within the TrueUSD Holdings Report.”

This additional warning appears to be an attempt to clarify that this new bank account is potentially under the control of Techteryx and is not explicitly separated like the other accounts.

TrueUSD has held an increasingly important role in the crypto ecosystem, more than doubling its market cap since the beginning of the year. This is thanks in part to its increased use by Binance following the New York Department of Financial Services shuttering Binance USD.

Protos has reached out to Archblocks and TrueUSD for clarification on what specifically led to this ripcord being activated.

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Control of TrueUSD private keys transferred to Techteryx https://protos.com/control-of-trueusd-private-keys-transferred-to-techteryx/ Wed, 03 May 2023 11:26:14 +0000 https://protos.com/?p=37843 Control of the private keys for TrueUSD have been transferred to Techteryx, a mysterious conglomerate in Asia with ties to Justin Sun.

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TrueUSD (TUSD) is a rapidly rising stablecoin that has seen its market cap increase from ~$950 million to ~$2.5 billion over the past three months, driven in part by Binance adopting TUSD as one of its zero-fee trading pairs.

The ownership of TrueUSD was changed in 2020 when a mysterious conglomerate referred to as ‘Techteryx’ purchased TrueUSD. The official announcement described Techteryx as an “Asia-based consortium that will be working with TRON.” The announcement on the MakerDAO forum tried to respond to claims that “TUSD’s new ownership is Justin Sun” by stating unequivocally, “no it is NOT.”

Several months later, Sun was listed as the ‘Asia Market Advisor’ to TrueUSD on its website. Sun also recently tweeted that he is a “partner market maker.” He made this claim during his attempts to explain the large transfer of TrueUSD to Binance that appeared to take advantage of an SUI promotion the exchange was running.

In statements to Protos, Archblock has repeatedly reiterated that it doesn’t have a business relationship with Sun and that he definitely doesn’t own Archblock. Protos has repeatedly reached out to Sun to clarify his relationship with TrueUSD and will update if we hear back.

Read more: Crypto market maker Justin Sun ‘accidentally’ takes advantage of SUI promo

Where exactly is Techteryx?

Locating Techteryx is challenging, with attestation reports for TrueUSD suggesting that Techteryx Ltd. — which is doing business as TrueUSD — is based out of Singapore. Searching Singapore’s Unique Entity Number Registry and Accounting and Corporate Regulatory Authority for Techteryx and TrueUSD doesn’t return any results.

The announcement post on the MakerDAO forum also made clear that people don’t need to worry because, even though Techteryx made this acquisition, “the conglomerate nor anyone else affiliated with the conglomerate has control over the underlying private keys and funds.” It also added that “the same TrustToken team will continue to be involved in minting and redemptions of TUSD, for compliance and for management of the underlying reserves.”

TrustToken would later rebrand as Archblock. Monica Ho, the Director of Capital Formation for Archblock, has informed Protos that “Archblock does not control the funds, but we manage the banking and trust relations for the user on their behalf. The private keys have been handed over to the Techteryx engineering team.”

Contrary to the original announcement which claimed that the Techteryx team “has no intention nor the ability to deal with private keys or technological matters,” it appears to have been able to take over those responsibilities from the Archblock team. As such, the structure and ultimate beneficial owners of Techteryx are no more clear than they were in 2020.

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Crypto market maker Justin Sun ‘accidentally’ takes advantage of SUI promo https://protos.com/crypto-market-maker-justin-sun-accidentally-takes-advantage-of-sui-promo/ Mon, 01 May 2023 17:20:44 +0000 https://protos.com/?p=37739 Binance chief CZ called out Justin Sun on Twitter for allegedly trying to stake large amounts of TrueUSD for a SUI token promotion.

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Tron chief Justin Sun, accused by the Securities and Exchange Commission (SEC) of using a network of entities under his control to manipulate the price of crypto tokens he’s connected to, has had to explain a large transfer of TrueUSD (TUSD) to Binance that appeared to be intended to take advantage of a Binance promotion of the SUI token.

Binance offered an opportunity on its LaunchPool product for people to earn SUI by staking Binance Coin (BNB) or TUSD. Shortly after this, a large transfer of TUSD from Justin Sun to Binance was flagged on Twitter. Changpeng Zhao (CZ), the CEO of Binance, warned the firm will “take action” if Sun tries to claim the tokens.

Sun tweeted to explain that they’re a “partner market maker” for TUSD with a goal of “enhancing liquidity and trading volume.” Unfortunately, “some of our team members were not fully aware of the intended purpose” and “used a portion of them to participate in exchange campaigns,” they said.

Read more: What’s up with TrueUSD and the rest of TrustToken’s stablecoins?

Sun claims that after recognizing the mistake, they were able to arrange for a full refund of the funds connected to this misuse of the SUI LaunchPool, and apologized to Zhao for the mistake.

Sun was previously listed as the “Asia Market Advisor” on TrueUSD’s website. However, in a previous statement to Protos on March 22, Archblock (formerly TrustToken Inc., the California-based firm that is a a service provider for TrueUSD) said it has no current direct business relationship with Sun.

Protos has reached out to Archblock and Sun to clarify how the crypto entrepreneur is a “partner market maker” without holding a business relationship with the firm, and will update if we hear back.

Update 17:27 PM UTC, May 1: Archblock reiterated in its response to Protos that it holds no business relationship with Justin Sun. “Our business relationship is with Techteryx,” its spokesperson said.

Update 15:25 UTC, May 2: A previous version of this article described Archblock as the owner of TrueUSD, Archblock is a service provider for TrueUSD and TrueUSD is owned by Techteryx.

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