Dubai Court Freezes $456M in Justin Sun Bailout Funds – Global Crypto Clampdown Intensifies
Dubai's Digital Economy Court drops a crypto bombshell: $456 million tied to Tron founder Justin Sun's bailout package now frozen worldwide. The ruling sends shockwaves through digital asset markets already reeling from regulatory pressure.
When courts start playing whack-a-mole with crypto funds, you know we're in for another 'regulated decentralization' circus. The freeze order covers multiple jurisdictions - proving once again that in crypto, your keys might be yours, but your liquidity belongs to the courts.
Sun's empire faces its biggest legal challenge yet as Dubai flexes its Web3 regulatory muscles. The move comes as no surprise to veterans who've seen this movie before - exchanges freezing assets, founders facing heat, and traders left holding the bag. Just another day in the 'wild west' of finance 2.0.
Techteryx pokes holes in fraudulent conspiracy
There are allegedly links between Finaport, FDT, Crossbridge, and Legacy on which Techteryx bases its allegation of fraudulent conspiracy. There are considerable issues regarding why the funds were paid to DMCC rather than the Fund.
However, Matthew Brittain, both the managing director of Aria DMCC and the CEO of Aria Fund, previously claimed that FDT (Mr. Chok) ordered the transfers. Mr. Chok denied the allegation. Brittain has also, on several occasions, claimed that the transfers were loans by FDT to DMCC and an investment in DMCC.
However, Justice Black said there are anomalies in the documentation regarding the payments. DMCC has been unable to show precisely how the money was spent, what assets were bought, or what became of them. DMCC says this is simply a function of the lapse of time.
Meanwhile, Brittain claimed the DMCC payments were FDT loans repaid in specie by the transfer of assets from DMCC to the Fund. He, however, added that FDT’s position in the Fund was regularized by what he called a “Porting” exercise.
Techteryx submitted that “Porting” is a fiction first raised in the course of the proceedings to explain away the anomalies. Techteryx also claimed that DMCC’s interest in Tanzanian mining assets and coal reserves was merely an attempt to place the Fund’s assets beyond the reach of enforcement.
Justice Black justifies his indefinite freeze order
Justice Black asserted that the power to make a freeze order in relation to an anticipated judgment of a foreign court is within the inherent power of the Supreme Court. He explained that when made, the anticipated judgment would be registrable by order of the Supreme Court under the Foreign Judgments Act.
Black believes that the making of the order protects a process of restoration and enforcement in the Supreme Court, which is in prospect of being invoked. He added that the same logic applies to the scope of the DIFC (Dubai International Finance Center) Court’s power to issue freezing orders. The DIFC Court has express jurisdiction to recognize and enforce foreign judgements.
Techteryx also agrees that there is no reason why the English court should not intervene when a company or its members act in a manner prejudicial to its creditors and in bad faith. In the present case, the wrongdoers should not be allowed to escape punishment, stressed Techteryx.
Meanwhile, Justice Black acknowledges that it will be rare for an injunction to be sought in aid of foreign proceedings from the DIFC Courts against a respondent over whom the Court does not have jurisdiction. He added that the jurisdiction of his court to enforce a foreign monetary judgment is succinctly described in the Memorandum, as stated at paragraph 6.4.
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