Dubai’s Digital Economy Court has upheld a worldwide freezing order over $456 million linked to the reserve shortfall that forced crypto entrepreneur Justin Sun to cover losses for holders of the TrueUSD stablecoin. The order prevents funds connected to the token’s reserves from being moved or liquidated while ownership claims are settled in Hong Kong courts.

The case turns on whether money backing TrueUSD was diverted into Aria Commodities DMCC, a Dubai-based trade-finance firm that financed commodity shipments and mining ventures in emerging markets, according to lawyers for the claimant Techteryx, the stablecoin’s issuer. The ruling, handed down on Oct. 17 by Justice Michael Black KC, said Techteryx had shown “serious issues to be tried” and a credible claim that the assets were held on constructive trust.

Black noted that Aria had provided “no evidence” explaining how the funds were transferred or who controlled the resulting assets. He added that there was a “real risk” the firm’s controlling figure, Matthew William Brittain, could dissipate or restructure holdings to evade future enforcement.

Investor Takeaway

How the Funds Moved

Aria Commodities, part of a group of companies controlled by Brittain, received the funds between 2021 and 2022 through accounts managed by First Digital Trust in Hong Kong, according to filings. The trustee was responsible for safeguarding reserves tied to TrueUSD’s circulation. First Digital Trust did not respond to a request for comment.

Techteryx alleges that the transfers breached its custody terms and turned liquid reserves into long-term loans and private investments that could not be redeemed when holders tried to withdraw. Those arrangements, the company says, led to the liquidity crisis that triggered the $456 million gap later covered by Sun.

Brittain previously said that liquidity problems were “a matter of term commitments,” not mismanagement. “ARIA CFF has never held [its] strategy out as highly liquid, or appropriate for the reserves of a stablecoin,” he said in earlier comments.

Wider Implications for Stablecoin Oversight

The dispute is being closely watched by financial regulators and digital asset lawyers as a test case for how courts handle allegations of reserve misuse across jurisdictions. While stablecoins are typically marketed as fully backed, cases like TrueUSD’s raise questions over transparency in asset custody and the legal recourse available when funds are commingled or invested in illiquid ventures.

The Dubai ruling also highlights how the emirate’s new Digital Economy Court — established to handle blockchain and fintech-related cases — is beginning to assert cross-border jurisdiction in crypto disputes. Its decision to enforce a global freezing order marks a precedent for digital asset litigation in the region.

Investor Takeaway

Next Steps in the Case

With the freezing order now in place, the next phase will take place in Hong Kong, where courts will determine whether the disputed assets belong to Techteryx or to Aria’s trading businesses. If Techteryx’s claims succeed, the funds could eventually be returned to TrueUSD’s reserves to restore full backing.

The outcome could set a broader precedent for the treatment of token reserves held through intermediaries — especially when those assets are invested beyond the low-risk instruments typically expected for stablecoins.