Archblock: TrueUSD Creator's Reserve Crisis Spans Four Crypto Bankruptcies

Archblock LLC, the San Francisco-based cryptocurrency company behind the TrueUSD stablecoin and TrueFi uncollateralized lending protocol, filed chapter 11 petitions on February 6, 2026, in the U.S. Bankruptcy Court for the District of Delaware. The filing covers six debtor entities, including Archblock LLC, TrustToken Inc., TrueCoin LLC, and a Cayman Islands subsidiary. The Cayman subsidiary's shareholder resolution states the company "does not have sufficient capital to maintain operations."

FTX/Alameda Research invested approximately $32.3 million in Archblock and holds an $8.5 million unsecured claim in the case. The Celsius estate sued Archblock, TrustToken, and TrueCoin in October 2025, alleging fraud and conversion over unreturned stablecoin reserves. Prime Trust, the custodian that processed TrueUSD minting through its bank accounts, entered receivership in June 2023 and subsequently filed its own chapter 11 case.

Debtor(s)	Archblock LLC (6 jointly administered entities)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	26-10152
Petition Date	February 6, 2026

TrueUSD and the Stablecoin Reserve Crisis

TrustToken Inc. launched TrueUSD (TUSD) in 2018 as a dollar-pegged stablecoin — a cryptocurrency pegged to the U.S. dollar. The company marketed each token as redeemable one-to-one for its fiat equivalent. By mid-2023, TUSD ranked as the fifth-largest stablecoin with a market capitalization exceeding $2.8 billion. Armanino LLP verified TUSD reserves every 30 seconds through an automated attestation system.

Reserve diversion. The SEC settled charges against TrueCoin LLC and TrustToken Inc. in September 2024, finding that the companies misrepresented TUSD's reserves. Rather than holding one-to-one dollar reserves, the stablecoin's issuer invested in a speculative offshore commodity fund. At peak, over 13% of TUSD reserves were tied to profit-seeking investments, and by March 2022, more than $500 million had been placed in the fund. TrueCoin and TrustToken each paid civil penalties of $163,766, and TrueCoin paid $340,930 in disgorgement plus $31,538 in prejudgment interest.

Trapped reserves. Approximately $456 million in TUSD reserves became trapped in illiquid investments from 2023 to early 2024. First Digital Trust, a Hong Kong-based fiduciary managing the reserves, directed funds into Aria Commodities DMCC, an unauthorized Dubai-based entity, rather than the intended Aria Commodity Finance Fund. Justin Sun provided emergency liquidity support to TUSD around July 2023, structured as a loan. Techteryx quarantined 400 million TUSD tokens to continue retail redemptions.

Prime Trust collapse. Prime Trust LLC, a crypto custodian that served as the fiat banking intermediary for TrueUSD minting, entered state receivership in June 2023. Customers wiring funds for TUSD minting sent dollars directly to Prime Trust's bank account at BMO Harris Bank. Prime Trust held only 3% of customers' cash on hand when regulators intervened. Archblock paused attestations for TrueGBP, TrueHKD, TrueCAD, and TrueAUD after the collapse.

TrueUSD depeg. In January 2024, TUSD fell as low as $0.926 on Poloniex after Binance excluded TUSD from Launchpool projects and discontinued zero-fee trading promotions. TUSD lost $307 million in market capitalization. BTC/TUSD trading volume fell 88% after Binance removed zero-fee trading.

Company History and Corporate Evolution

Founding and early fundraising. TrustToken was founded in 2017 by Rafael Cosman, Danny An, Stephen Kade, and Tory Reiss. The company raised $20 million in a strategic token sale in June 2018, led by Andreessen Horowitz (a16z), with participation from BlockTower Capital and Danhua Capital. Additional investors included Founders Fund Angel, Jump Trading Capital, GGV Capital, and Signia Venture Partners. In 2017 and 2019, TrustLabs issued investment contracts known as SAFTs (simple agreements for future tokens) and raised $35 million total.

Product expansion. TrustToken launched TrueUSD and TRU governance tokens in 2018 and planned multicurrency stablecoins including TrueEUR and TrueYEN. Token sales were open only to accredited investors via CoinList. In August 2021, TrustToken raised $12.5 million in a funding round with a16z, BlockTower Capital, and Alameda Research; investors purchased TRU tokens for the TrueFi uncollateralized lending protocol. TrueFi originated nearly $2 billion in uncollateralized loans. Archblock also acquired EthWorks on September 15, 2021.

Leadership changes and litigation. Co-founder and CEO Daniel Jaiyong An was ousted by board vote in July 2020, led by Rafael Cosman, Alex de Lorraine, and Tom Shields. Cosman replaced An as CEO. An was negotiating with Justin Sun to sell TrueUSD — then valued at approximately $2.8 billion — to the Tron blockchain when he was pushed out. An filed a pro se lawsuit in July 2023 claiming nearly $100 million in damages; the company had previously sued An for deleting Slack messages and data.

Rebrand and TrueUSD sale. TrustToken officially rebranded to Archblock in September 2022 under CEO Ryan Christensen. Techteryx Ltd., a British Virgin Islands company, purchased TrueUSD in December 2020. Archblock continued managing TrueUSD operations for over two and a half years after the sale, until Techteryx assumed full management in July 2023. TrueCoin continued running day-to-day TUSD operations during the transitional period. Archblock transferred TrueFi treasury, smart contracts, and intellectual property to a decentralized autonomous organization (DAO) — a governance structure controlled by token holders rather than a central entity.

TrueFi Lending and Defaults

TrueFi, Archblock's uncollateralized lending protocol, originated nearly $2 billion in loans. The protocol lent to institutional borrowers who passed credit and KYC (know-your-customer) checks but did not pledge collateral.

Blockwater default and bad debt. Blockwater Technologies defaulted on a $3.4 million TrueFi loan, and Invictus Capital had a $1 million loan at risk after filing for voluntary liquidation in summer 2022. Total bad debt on TrueFi reached $4 million. The default protection fund held only $1.36 million — one-third of the outstanding bad debt. The TRU token price dropped 15% after the Blockwater default and was down 90% over the prior year, trading at 4.4 cents.

Wintermute exposure. Wintermute had $92 million outstanding as TrueFi's largest borrower and separately suffered a $160 million hack.

Alameda Research as investor and user. Alameda Research was described as one of TrueFi's largest users before defaulting on uncollateralized loans.

FTX and Alameda Research Entanglement

The FTX/Alameda bankruptcy docket documents multiple transactions between TrustToken/Archblock and Alameda Research from 2018 to 2021.

Investment exposure. FTX/Alameda invested approximately $3.5 million in an Archblock venture round in July 2021 and $12.5 million in the TrueFi ICO in August 2021. An FTX investment summary lists total Archblock investment at $32.3 million. Alameda Research holds an $8.5 million unsecured claim in the Archblock case, listed as a "Potential Creditor" on the petition.

Loan and market-making contracts. FTX bankruptcy schedules show that Alameda Research LLC and TrustToken executed at least five loan agreements between October 2018 and January 2021, along with a market maker service agreement and an advisor agreement dating to September 2018. Alameda Research Ltd's amended schedules list an additional loan agreement and market maker service agreement from January 2021. TrustToken Inc. lent 7.2 million TRU tokens to Alameda Research Ltd. at a 0% interest rate with no maturity date. TrustToken also holds a secured claim against Alameda Research LLC, secured by UCC File Number 20190194758, with the claim amount listed as undetermined, contingent, and disputed. TrustToken holds secured and unsecured claims in the FTX case, while Alameda holds the $8.5 million claim in the Archblock case.

Stablecoin infrastructure. TrueCoin functioned as an intermediary converting customer stablecoins to U.S. dollars within FTX's operations, alongside Circle Internet Financial. The FTX Examiner's Report noted that FTX and Binance shared a TrueUSD redemption address, with the examiner observing that "either TrueUSD made a mistake and sent the same address to these two rival exchanges or they are coordinating TrueUSD on some level." AlixPartners, FTX's financial advisor, conducted specific investigations into TrustToken loans and "Alameda repayment of TUSD loans." Ernst & Young classified ArchBlock Cayman as a "Claimant" and TrustToken as a "Contract Counter-Party" in the FTX case.

Attestation credibility. TrueUSD's Proof of Reserves was attested by The Network Firm, which emerged from Armanino's digital asset practice. Armanino previously attested reserves for FTX.US and faced quality-control deficiencies identified by the PCAOB in 2019.

Celsius Litigation and Prime Trust Claims

Celsius lawsuit. On October 17, 2025, the Celsius Litigation Administrator filed a lawsuit against Archblock, TrustToken, and TrueCoin in the Northern District of California (Case No. 25-cv-08966JD), alleging fraud, conversion, and negligence. Celsius minted more than $14 million worth of TrueCurrency assets — TrueAUD, TrueCAD, and TrueGBP — between 2019 and 2022 and sought to redeem approximately $12.9 million during its 2023 bankruptcy process. The defendants refused redemption, citing lost access to reserves after Prime Trust LLC entered receivership and First Digital Trust failed. The defendants answered the complaint on November 18, 2025, and discovery commenced.

TrustToken in the Celsius estate. The Celsius Examiner's Final Report classified TrustToken among Celsius's "non-yielding" assets — smaller coins that provided no revenue. A July 2021 Risk Committee report found that 36% of Celsius's assets were non-yielding. Celsius customer accounts held TUSD alongside USDC, USDT, DAI, and PAX. The Celsius estate classified Archblock/TrustToken holdings as "illiquid cryptocurrency assets" and recovered some proceeds through its illiquid crypto monetization effort, which generated approximately $12.4 million in total proceeds from illiquid crypto through December 2025. TrustToken and Celsius Network Inc. had also executed a promissory note on November 12, 2019.

Prime Trust minting mechanics. Customers purchasing TUSD via TrueCoin's website were directed to wire funds directly to Prime Trust LLC's bank account at BMO Harris Bank. In one documented instance, JBS Global Ltd. wired $73,000 on June 19, 2023, for TUSD minting. Prime Trust received the funds but placed them in "suspense." TrueCoin attempted to have the wire rejected and returned on June 21-22, 2023, but Prime Trust entered state receivership before the return could be processed, leaving the customer funds frozen.

Prime Trust vendor agreement. Prime Trust had a vendor agreement with Archblock (TrustToken, Inc.) that the Prime Trust debtors rejected in November 2023, terminating the formal custodial relationship. TrueCoin and TrustToken are active interested parties in the Prime Trust case, represented by the same counsel as in the Archblock chapter 11 filing — Wollmuth Maher & Deutsch LLP (William J. Hagan, Fletcher W. Strong) and Ashby & Geddes, P.A. (Gregory A. Taylor). Alex de Lorraine is listed as the contact for TrueCoin and TrustToken on Prime Trust service lists.

Techteryx dispute. Techteryx, the BVI company that purchased TrueUSD, alleged fraud in a separate proceeding, claiming it was induced into the purchase by representations that TrueCoin maintained one-to-one dollar reserves. The Singapore High Court granted an anti-suit injunction in November 2024, restraining Techteryx from pursuing proceedings against TrueCoin in Hong Kong — the first anti-suit injunction in a Singapore cryptocurrency dispute.

Corporate Structure and Creditor Landscape

Six debtor entities. The filing covers Archblock LLC (lead debtor), TrustToken Inc., TrueCoin LLC, TrueCoin II LLC, TrueTrading 1 GP LLC, and Archblock (Cayman), all wholly owned subsidiaries of Archblock LLC. The Cayman subsidiary is incorporated as an exempted company and registered at Walkers Corporate Limited in George Town. The company has operated under several prior names, including TrustLabs Inc., ZenTrusts Inc., and Win the Game Inc.

Entity	Est. Assets	Est. Liabilities	Creditors
Archblock LLC	$1M–$10M	$100M–$500M	1–49
TrustToken, Inc.	$100M–$500M	$10M–$50M	200–999
TrueCoin, LLC	$10M–$50M	$10M–$50M	200–999
Archblock (Cayman)	$50M–$100M	$50M–$100M	1–49
TrueCoin II, LLC	$0–$50K	$0–$50K	1–49
TrueTrading 1 GP LLC	$0–$50K	$0–$50K	1–49

Equity concentration. Alex de Lorraine holds 55.96% of Archblock LLC's equity, with William Wolf holding 21.43%, giving them combined control of ~77%. TrustToken Inc. holds 5.75% of Archblock LLC equity, and Archblock (Holding) AG holds 3.69%.

Key creditors. Of the top 30 unsecured creditors, only 12 have quantified claim amounts. Alameda Research LLC holds the largest quantified unsecured claim at $8,512,910, listed as a "Potential Creditor." The IRS holds the largest government claim at $1.3 million. Delaware taxes total approximately $180,000. Orrick, Herrington & Sutcliffe LLP holds a disputed legal services claim of $89,671, and Oasis Pro Inc. holds a $250,000 claim described as a "potential creditor in threatened dispute." Most of the largest claims are unliquidated — Celsius Network, Prime Trust, Techteryx, First Digital Trust, and Daniel Jaiyong An all hold disputed or unliquidated claims. Multiple individual creditors from positions 20 through 29 hold "unliquidated unsecured loans." Creditors span the U.S., Norway, Germany, Australia, China, Hong Kong, and the Cayman Islands.

Case counsel. Wollmuth Maher & Deutsch LLP serves as counsel for the chapter 11 cases. Chipman Brown Cicero & Cole, LLP serves as local Delaware counsel, with attorney William E. Chipman Jr. filing all petitions. Michael Bland, listed as "Authorized Person," signed the filings for all debtor entities. Ashby & Geddes, P.A., which serves as Archblock's Delaware counsel in the Prime Trust case, previously disclosed in the FTX case that it "currently represents TrustToken, Inc. and/or its affiliate(s) in an unrelated matter." Ashby & Geddes also appears on the Archblock creditor list for $1,771 in legal services.

Early-stage status. As of the filing date, no first day declarations, first day motions, DIP or cash collateral motions, schedules, or retention applications have been filed. No judge has been assigned. The docket contains only the six voluntary petitions and six filing fee receipts.

Binance's Role in TrueUSD's Rise and Fall

Zero-fee trading promotion. In March 2023, Binance retained zero-fee trading only for the BTC-TUSD pair after removing it for most other pairs. Zero-fee pairs represented approximately 60% of Binance's total trading volume before the change. TUSD daily trading volume exceeded $1 billion — the BTC-TUSD pair alone recorded $713 million in 24-hour volume — and TUSD's market cap grew from below $800 million to $2 billion. TUSD's market share rose to 49% between BTC-TUSD and BTC-USDT pairs on Binance. TUSD had previously recorded mostly sub-$100 million daily trading volume. Separately, the New York Department of Financial Services ordered Paxos to wind down BUSD in February 2023, and BUSD supply fell from $16 billion to $8 billion.

End of Binance promotions. Binance excluded TUSD from Launchpool projects in January 2024 and discontinued zero-fee trading promotions. BTC/TUSD volume fell 88%. TUSD fell as low as $0.926 and lost $307 million in market cap. Binance accounted for over 99% of TUSD's trading volume. FDUSD gained $786 million in market cap as TUSD declined.

Frequently Asked Questions

Why did Archblock file for bankruptcy?

The filing authorization states the company "does not have sufficient capital to maintain operations." At the time of filing, the company faced litigation from the Celsius estate, an $8.5 million claim from Alameda Research, SEC enforcement penalties totaling over $700,000, disputes with Techteryx, and the receivership of its custodial partner Prime Trust.

What is TrueUSD (TUSD)?

TrueUSD is a dollar-pegged stablecoin launched by TrustToken in 2018. Each token was marketed as redeemable one-to-one for U.S. dollars. At its peak, TUSD had a market cap exceeding $2.8 billion and ranked as the fifth-largest stablecoin. TrustToken sold TrueUSD to Techteryx, a BVI company, in December 2020.

Who owns TrueUSD now?

Techteryx Ltd., a British Virgin Islands company, purchased TrueUSD from TrueCoin in December 2020. Archblock continued managing TrueUSD operations until Techteryx assumed full control in July 2023. Techteryx appears on Archblock's creditor list with unliquidated claims from multiple disputes.

What is TrueFi?

TrueFi is an uncollateralized lending protocol developed by TrustToken that originated nearly $2 billion in loans. Borrowers passed credit and KYC checks but did not pledge collateral. Archblock transferred TrueFi's treasury, smart contracts, and intellectual property to a decentralized autonomous organization (DAO).

How is the Archblock bankruptcy connected to FTX?

Alameda Research, the FTX-affiliated trading firm, invested approximately $32.3 million in Archblock and participated in TrueFi's $12.5 million funding round. TrustToken and Alameda executed at least five loan agreements and two market maker agreements between 2018 and 2021. Alameda holds an $8.5 million unsecured claim in the Archblock case, while TrustToken holds claims in the FTX case.

What is the Celsius lawsuit against Archblock?

Celsius Network filed a lawsuit against Archblock, TrustToken, and TrueCoin in October 2025, alleging fraud, conversion, and negligence for failing to return foreign currency backing Celsius's TrueCurrency Token holdings. Celsius minted more than $14 million worth of TrueCurrency assets between 2019 and 2022 and sought to redeem approximately $12.9 million. Discovery commenced after the defendants answered the complaint in November 2025.

How many entities are included in the Archblock bankruptcy?

Six entities filed chapter 11 petitions: Archblock LLC (lead debtor), TrustToken Inc., TrueCoin LLC, TrueCoin II LLC, TrueTrading 1 GP LLC, and Archblock (Cayman). All subsidiaries are wholly owned by Archblock LLC.

What happened to TrueUSD's reserves?

The SEC found that TrueUSD's reserves were invested in a speculative offshore commodity fund rather than held one-to-one in U.S. dollars. Approximately $456 million became trapped in illiquid investments after First Digital Trust directed funds into an unauthorized Dubai-based entity rather than the intended Cayman Islands fund. TrueCoin and TrustToken each paid $163,766 in civil penalties.

Who is the claims agent for Archblock?

A claims agent has not yet been appointed. The case was filed on February 6, 2026, and retention applications have not yet been filed.

For more bankruptcy case analyses and restructuring insights, visit ElevenFlo's bankruptcy blog.