- Archblock’s co-founder filed a lawsuit alleging he was forced out of his firm.
- The lawsuit also centers on the breach of security laws regarding SAFTs.
- Despite ownership change, Archblock continues to oversee TrueUSD operations.
Daniel Jaiyong, co-founder of Archblock, a prominent stablecoin developer responsible for TrueUSD, filed a lawsuit, accusing his former associates of forcing him out of the company in 2020 for their gains, leaving investors at a loss.
The lawsuit revolves around the events leading up to Jaiyong’s removal from the company he co-founded with Rafael Cosman. The suit reveals that in 2017 and 2019, TrustLabs, an Archblock entity, issued investment contracts called “simple agreements for future tokens” (SAFTs).
These contracts were intended to raise funds for a tokenization platform’s development. TrustLabs successfully raised $35 million through the SAFTs, releasing TrueUSD and TRU tokens in 2018.
However, the suit claims Cosman began steering the company away from the tokenization platform and into other profit avenues, like the TrueRewards program, later renamed TrueFi. Jaiyong reportedly grew concerned that TrustLabs’ new direction was far from what they had initially promised investors, potentially breaching securities laws as the venture transformed into something resembling a blockchain lender.
Jaiyong wanted to be transparent with investors, disclosing the pivot and offering a refund option. However, Cosman and other senior staff were allegedly hesitant about losing their lucrative position if they divulged the shift in direction to investors.
In July 2020, Cosman, alongside TrustLabs’ finance director Alex de Lorraine and board member/advisor Tom Shields, orchestrated a vote that removed Jaiyong from his CEO position and replaced him with Cosman.
During his ousting, Jaiyong was reportedly in discussions with billionaire entrepreneur Justin Sun, looking into the possibility of selling TrueUSD to Sun’s blockchain company, Tron. In the end, TrueUSD was eventually sold to a consortium named Techteryx, based in the British Virgin Islands.
Despite the change in ownership, Archblock continued to oversee the operations of TrueUSD. Recently, Techteryx announced its full takeover of offshore operations and services related to TrueUSD on the same day the lawsuit was filed.
Regrettably, Jaiyong was ousted from Archblock while the talks with Tron were still ongoing, rendering him unable to represent the interests of the SAFT investors. Archblock, however, refuted the allegations made in the lawsuit, asserting that Mr. Jaiyong’s claims lacked merit.
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