Archblock files for bankruptcy, alleging related-party transactions involving Justin Sun and fraud in Eastern Europe

Gate News message: crypto companies Archblock, TrustToken, and TrueCoin have recently filed for bankruptcy protection. The reasons include Techteryx failing to pay outstanding invoices, as well as Archblock being scammed by a “highly sophisticated criminal group in Eastern Europe.” In a sworn statement, Archblock’s current legal counsel, Michael Blank, said that in 2020 the company sold the stablecoin TrueUSD to Techteryx, which was associated with Justin Sun, and signed a revenue-sharing services agreement. However, Techteryx stopped making payments on the millions of dollars it owed starting in 2024.

Archblock and its sister companies have also been drawn into multiple legal disputes, including escrow and investment controversies involving Legacy Trust, First Digital Trust, and Aria Commodity Finance Fund. Some of the funds were originally meant for low-risk investments, but were instead put into high-risk speculative activities. This led to a halt in redemptions and prompted a lawsuit by the U.S. Securities and Exchange Commission. Justin Sun previously provided about a $500 million credit facility for TrueUSD, but the dispute remains unresolved.

The companies’ bankruptcy was further affected by the failures of Prime Trust, Silvergate Bank, and Signature Bank. The sworn statement shows that Archblock failed to properly handle taxes for fiscal year 2021, and roughly $1.3 million in tax issues compounded the financial pressure. In addition, when the company sought new financing, it was confirmed to have been scammed out of about $3 million by a criminal group in Eastern Europe, directly worsening its financial situation.

Archblock is currently facing a large number of unresolved lawsuits, including claims against Prime Trust, First Digital Trust, Techteryx, and Aria Commodity Finance Fund, as well as debt disputes involving Celsius and FTX Recovery Trust. Legal problems between former CEO Daniel Jaiyong An and the related companies have also persisted for a long time. The list of creditors also includes Alameda Research, Finder Wallet, and the SEC.

This bankruptcy case reveals potential risks in the stablecoin industry, including related-party transactions, custodian failures, fraud incidents, and improper tax management, with broad impacts on investors and the digital asset ecosystem. (Protos)