A Dubai court has frozen more than $456 million (Dh1.67 billion) in assets worldwide in what is believed to be the first case involving the alleged diversion of funds meant to back a cryptocurrency 'stablecoin'.

In a landmark decision made public in October, the DIFC's Digital Economy Court issued an indefinite worldwide freezing order against Dubai-registered Aria Commodities DMCC and any banks or entities holding the disputed funds or assets purchased with them.

The order, signed on October 17 by Justice Michael Black, prevents the $456 million and any proceeds linked to it from being moved or concealed anywhere in the world. It is the DIFC Courts' first global freeze in a cryptocurrency-related matter and carries penalties, including fines or imprisonment, for anyone who breaches it.

The case revolves around TrueUSD (TUSD), a stablecoin designed to maintain a fixed value of one US dollar. To do that, every TUSD in circulation must be backed by real dollars held in reserve.

According to court filings between 2021 and 2022, nearly half a billion dollars was removed from these reserves and channelled into private investments, including commodity trading and mining projects. The transfers were allegedly carried out using forged instructions and falsified documents.

Techteryx Ltd, the owner of TrueUSD and controlled by Chinese cryptocurrency entrepreneur Justin Sun, said the shortfall was discovered during audits earlier this year. Sun, 35, founded the TRON blockchain platform in 2017 and has remained a high-profile figure in global crypto markets. He has previously faced US regulatory scrutiny but continues to be active in the sector.

To ensure that TUSD holders were not affected, Techteryx said it injected hundreds of millions of dollars in fresh funds so that every token remained fully redeemable at one US dollar. The company maintains that no member of the public has suffered losses as a result of the alleged diversion.

Techteryx has since initiated legal proceedings in several jurisdictions, including Hong Kong and the Cayman Islands. In Dubai, it requested a freeze to prevent the funds from disappearing.

Justice Black granted the application, ordering that the money and any related assets remain untouched until the court decides otherwise. The order applies globally, and anyone assisting in moving the funds could face contempt proceedings in Dubai.

In a public statement last month, Justin Sun called the decision a“fair and resolute ruling” and said the freeze is a key step toward recovering the reserves. At a media briefing in Hong Kong on November 27, he shared new information on tracing efforts underway globally, alleging that a network of custodians facilitated the transfers through cross-border movements and kickbacks. He said Techteryx's focus is on full recovery and pushed for stronger international audits across the stablecoin market.

The DIFC's Digital Economy Court was set up to handle disputes involving blockchain, cryptocurrencies and emerging technologies. A lawyer familiar with DIFC court procedures said the order signals Dubai's readiness to use its legal tools to safeguard the digital asset industry.

The full judgment is publicly available on the DIFC Courts' website.

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