Archblock, TrustToken, and TrueCoin, the firms originally behind stablecoin TrueUSD, have declared Chapter 11 bankruptcy protection, citing Techteryx’s failure to pay invoices and Archblock being defrauded by “a sophisticated criminal enterprise working out of Eastern Europe.”
This comes after Archblock and its sister firms became embroiled in a series of calamities and legal disputes and sold several key parts of its business.
Techteryx and Justin Sun
The affidavit of Michael Blank, the current general counsel for Archblock, claims that in 2020, Archblock committed to “a significant downsizing, materially reducing its burn rate and extending its operational runway.”
In order to achieve this, it made the choice to sell TrueUSD.
Specifically, it chose to sell it to Justin Sun-connected Techteryx.
Control of TrueUSD private keys transferred to Techteryx
This sale, according to the affidavit, was completed in December 2020.
However, despite the sale, Archblock was going to help Techteryx operate the stablecoin. The two firms entered into “an ongoing services agreement with revenue-sharing components,” which Archblock believed would “provide a stable and predictable revenue stream.”
This revenue stream would eventually become something that Archblock was “almost entirely reliant on.”
This sale was for “approximately $28 million.”
However, according to the affidavit, in 2024, Techteryx “ceased paying several million dollars in outstanding invoices.”
First Digital Trust/Legacy Trust/Aria Commodity Finance Fund
Techteryx ceased paying after a series of extended legal disputes involving Legacy Trust, First Digital Trust, the Aria Commodity Finance Fund, and the Archblock firms.
The firms had originally contracted with Legacy Trust to provide escrow services, which were later transferred to First Digital Trust. Eventually, First Digital Trust negotiated for the right to manage some of the funds and placed them in the Aria Commodity Finance Fund.
This was marketed as a supposedly low-risk fund.
TrueUSD firms dodge fraud claims with SEC settlement
It wasn’t.
Instead, the firm invested the funds in much more speculative activities and eventually stopped responding to redemption requests.
This led, in part, to a Securities and Exchange Commission (SEC) lawsuit against the firm, which was settled.
Despite that settlement, TrueUSD is still substantially reserved by these assets and by the creditworthiness of Sun, who’s reportedly provided a $500 million line of credit to the beleaguered stablecoin.
There are still ongoing disputes in several jurisdictions related to these agreements.
Prime Trust and Crypto Banking disappeared
In addition, the Archblock firms were pushed closer to bankruptcy with the downfall of various cryptocurrency banking partners and payment processors.
The affidavit claims that in 2023, “several critical banking and trust company partners collapsed or were shut down, including Silvergate Bank, Signature Bank, and, most significantly, Prime Trust.”
These failures, specifically Prime Trust’s insolvency, “created potential liabilities to end users of the TrueCurrency stablecoin products.”
$1.3 million in IRS Taxes
Besides these difficulties, a failure to adequately manage tax liabilities has also contributed to the Archblock firms’ bankruptcy.
According to the affidavit, there was a problem with Archblock’s fiscal year 2021 tax payment.
Specifically, the affidavit claims that “in February 2025 the IRS began making inquiries as to an apparent processing error at the IRS where a FY 2021 tax payment made by Archblock was incorrectly processed and mistakenly issued back to Archblock as a refund.”
This has resulted in an estimated total liability of $1.3 million.
Eastern European “sophisticated criminal enterprise”
Placing the straw on this camel’s back was Archblock’s most recent failed fundraising.
After Prime Trust’s failure and Techteryx’s so-called “nonpayment” as well as TrustToken and TrueCoin’s 2024 settlement with the SEC, Archblock committed to a new direction for the firm: “the development of a new stablecoin platform and the resolution of ongoing legal disputes.”
In order to support this new direction, Archblock sought out additional fundraising.
TrueUSD firms dodge fraud claims with SEC settlement
As part of this process, “one promising primary funding lead emerged.”
Unfortunately, “this investment lead turned out to be a sophisticated criminal enterprise working out of Eastern Europe.”
This sophisticated criminal enterprise “ultimately defrauded Archblock of approximately $3 million.”
This resulted in changes to “Archblock’s financial position that could not be remedied through further cost reductions or asset sales.”
As such, “throughout 2025, Archblock focused on ceasing remaining activities, resolving obligations where possible, and selling any non-liquid assets.”
Ongoing disputes
There are a substantial number of ongoing legal disputes that involve the Archblock firms.
These include its claims against the Prime Trust estate and Prime Trust’s claims against Archblock.
Archblock is seeking approximately $9 million it had deposited with Prime Trust at the time of bankruptcy, and the Prime Trust estate has claimed that Archblock benefited from preferential and fraudulent transfers.
It also includes the lawsuits it has engaged in against First Digital Trust, Techteryx, Aria Commodity Finance Fund, and other related entities.
These suits center around the permissions that the Archblock firms gave to the Trust firms, what representations were made by the Trust firm and the Aria Commodity Finance Fund, and at what time individuals became aware of problems.
They also include Celsius’ and FTX’s claims against Archblock.
Celsius alleges that Archblock “promised customers that their deposits would be held securely and risk-free by ‘fiduciary partners’ in cash or cash-equivalent” but actually “gambled their customers’ deposits on risky offshore investments with partners who disclaimed any fiduciary duties.”
Allegations from Celsius are based on the funds that were invested in the Aria Commodity Finance Fund and its apparent failure.
Additionally, “The FTX Recovery Trust alleges that Archblock LLC owed the Trust $8,512,910.”
Briefly, it’s important to remember that Archblock had a relationship with Alameda Research, a lead investor in TrustToken and the TRU token.
Additionally, Alameda was a user of the TrueFi platform and defaulted on approximately $7.3 million in loans it obtained through this platform and is mentioned as a creditor in other documents filed in this bankruptcy.
Alameda is also listed as a possible creditor on the Creditor Mailing Matrix.
Additionally, the schedules of assets and liabilities of Archblock (Cayman) lists an “Alameda Loan Receivable” with a “total face amount” of $7,508,173.15.
This same document notes that Archblock claims to have held digital assets on FTX, and it’s requested $530,472.07.
Former Archblock CEO Daniel Jaiyong An is suing Archblock
Furthermore, the former Chief Executive, Daniel Jaiyong An, has been engaged in a years-long legal dispute with these firms.
Who’s on the Archblock bankruptcy creditor list?
Besides Alameda Research, there are a few other interesting names on the creditor matrix.
One of these is Finder Wallet, a brief-lived Australian firm that offered yield on the TrueAUD (TAUD) stablecoin.
This firm was led by Australia’s so-called “crypto king” Fred Schebesta, who notably sold his over-the-counter trading firm, HiveEx, to Alameda Research.
HiveEx, Genesis Block, and SBF’s trading desk network
Several firms related to Crypto.com also show up in the creditor matrix.
The SEC is also still listed on this creditor matrix, raising interesting questions about whether or not Archblock had paid the amount specified in its settlement with the regulator.
Protos reached out to Archblock with questions related to this ongoing bankruptcy, but it didn’t provide comment before publication.
