Former CEO of stablecoin TUSD sues the company, claiming to have been ousted during negotiations for acquisition by Tron.

Former TUSD CEO sues company, claiming to be ousted during Tron acquisition negotiations.

Author: DL News

Translation: Joy, LianGuaiNews

Archblock, the developer of stablecoin TrueUSD, has been sued by its ousted CEO, who claims that his former colleagues forced him to step down so that they could continue to profit at the expense of investors.

In a complaint filed with the Delaware court on July 14th, Archblock co-founder Daniel Jaiyong An stated that he was removed from his position as CEO in mid-2020.

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According to the lawsuit seen by DL News, at the time he was negotiating the sale of TrueUSD (a stablecoin worth $2.8 billion) to Tron, a blockchain company owned by billionaire Justin Sun.

“This lawsuit has nothing to do with me,” Justin Sun told DL News. “It is a former Archblock employee suing Archblock.”

He did not answer questions about whether Tron attempted to purchase TrueUSD in 2020 as alleged in the lawsuit.

The transaction for TrueUSD did indeed take place that year. A consortium based in the British Virgin Islands called Techteryx acquired TrueUSD from Archblock in 2020, but Archblock continued to manage the operations of TrueUSD.

On the same day the lawsuit was filed, an Archblock subsidiary announced that Techteryx, which was not mentioned in the lawsuit, would take over the “full management of all offshore businesses and services related to TUSD.”

What does the lawsuit entail?

The Archblock lawsuit only briefly mentions Justin Sun.

It details how An was ousted from the company he co-founded with Rafael Cosman in July 2020.

In 2019 and 2019, TrustLabs launched an investment contract called the Simple Agreement for Future Tokens (SAFT). The idea was to raise funds for the development of tokenized platforms. The TrustLabs SAFT gave investors the right to receive TRU tokens by 2023, provided that they were funding the development of the platform.

The SAFT raised $35 million for TrustLabs, which issued TrueUSD and TRU tokens in 2018.

However, according to the lawsuit, in 2020, Rafael Cosman started shifting towards other revenue opportunities from the tokenized platform and introduced a rewards program for TrueUSD holders called TrueRewards, later renamed TrueFi.

The complaint states that people were concerned that TrustLabs’ new business model deviated significantly from what they had promised to investors.

An wanted to disclose this move to investors and provide them with an opportunity for refunds, or else face the risk of violating securities laws, especially as the new company began to look more like a blockchain lending institution.

But according to the lawsuit, Rafael Cosman and other executives were concerned that they would lose their cash cow if they disclosed the new direction to investors.

In July 2020, Rafael Cosman, TrustLabs CFO Alex de Lorraine, and board member and advisor Tom Shields led a vote to remove An and appoint Cosman as CEO.

The lawsuit alleges that at this time, An is in negotiations with blockchain company Tron to sell TrueUSD. The lawsuit includes screenshots of what appears to be a conversation between An and Justin Sun regarding the negotiations for the sale of TrueUSD. Sun appears to have requested confidentiality for the transaction, but An refused.

According to Telegram chat screenshots submitted in the documents, An expressed to Justin Sun during the communication, “We’re doing a trade, and it remains confidential to a few people, which is not feasible – it’s like handing over the keys and printing rights to $140 million without telling the relevant stakeholders.”

The lawsuit claims that just as the negotiations with Tron were nearing completion, An was ousted and unable to represent the interests of SAFT investors due to ongoing legal threats from the defendant.

Archblock denies the claims made in the lawsuit.

“Mr. An’s current allegations will be proven baseless. We intend to respond to Mr. An’s allegations in court soon, which will clarify the matter,” a spokesperson said.

“Given that these matters are in litigation, we do not intend to make further comments outside of the proceedings.”

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