TUSD (TrueUSD) is a stablecoin pegged to the US dollar. Its related incident of extracting profits involves a significant custodial fraud case where $456 million in reserves was improperly diverted. The involved chain spans multiple regions and has also prompted discussions on the regulation of the stablecoin industry.
At the end of 2020, the Asian consortium Techteryx acquired TUSD and entrusted the original operator, TrueCoin, to continue managing the reserves. TrueCoin collaborated with the Hong Kong trust company FDT for fund custody. The reserves should have been deposited into a compliant Cayman Islands fund but instead laid the groundwork for subsequent misappropriation.
From 2021 to early 2023, TrueCoin and FDT conspired to secretly transfer $456 million in TUSD reserves in six transactions to a private company in Dubai wholly owned by the wife of a person involved in the case, rather than the agreed compliant fund. These funds were invested in various global high-risk, low-liquidity projects such as asphalt manufacturing and coal mining rights, effectively draining the funds. Meanwhile, the parties involved also forged fund subscription documents to disguise the misappropriated funds as legitimate related loans, covering up the fraudulent activities. During this period, the head of FDT received illegal kickbacks of approximately $15.5 million for facilitating the fund transfers.
In July 2023, after Techteryx took over TUSD operations, it was discovered that the involved parties were unable to pay interest and refused to redeem the funds, which fully exposed the matter. Subsequently, Tron founder Justin Sun provided approximately $500 million in personal funds to support the liquidity gap, ensuring that users could redeem normally. In September 2024, the US SEC publicly defined TrueCoin's actions as fraudulent, and in October 2025, a Dubai court issued an indefinite global asset freeze order, freezing the assets of the involved Dubai company; this was also the first time such a freeze order was issued by this court.
Although the case did not cause direct losses in user redemptions due to emergency fund supplementation, it exposed regulatory loopholes in the custodial aspects of stablecoins, making investors aware that trust institutions are not a safe deposit box for funds. At the same time, it has become a typical case in the stablecoin industry, prompting the industry to pay attention to issues such as the transparent disclosure of trust funds and mandatory detailed audits, providing a reference model for regulatory agencies in various countries to formulate relevant rules.
At the end of 2020, the Asian consortium Techteryx acquired TUSD and entrusted the original operator, TrueCoin, to continue managing the reserves. TrueCoin collaborated with the Hong Kong trust company FDT for fund custody. The reserves should have been deposited into a compliant Cayman Islands fund but instead laid the groundwork for subsequent misappropriation.
From 2021 to early 2023, TrueCoin and FDT conspired to secretly transfer $456 million in TUSD reserves in six transactions to a private company in Dubai wholly owned by the wife of a person involved in the case, rather than the agreed compliant fund. These funds were invested in various global high-risk, low-liquidity projects such as asphalt manufacturing and coal mining rights, effectively draining the funds. Meanwhile, the parties involved also forged fund subscription documents to disguise the misappropriated funds as legitimate related loans, covering up the fraudulent activities. During this period, the head of FDT received illegal kickbacks of approximately $15.5 million for facilitating the fund transfers.
In July 2023, after Techteryx took over TUSD operations, it was discovered that the involved parties were unable to pay interest and refused to redeem the funds, which fully exposed the matter. Subsequently, Tron founder Justin Sun provided approximately $500 million in personal funds to support the liquidity gap, ensuring that users could redeem normally. In September 2024, the US SEC publicly defined TrueCoin's actions as fraudulent, and in October 2025, a Dubai court issued an indefinite global asset freeze order, freezing the assets of the involved Dubai company; this was also the first time such a freeze order was issued by this court.
Although the case did not cause direct losses in user redemptions due to emergency fund supplementation, it exposed regulatory loopholes in the custodial aspects of stablecoins, making investors aware that trust institutions are not a safe deposit box for funds. At the same time, it has become a typical case in the stablecoin industry, prompting the industry to pay attention to issues such as the transparent disclosure of trust funds and mandatory detailed audits, providing a reference model for regulatory agencies in various countries to formulate relevant rules.
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