Archblock - Chapter 11 Case Summary

Business Description

Headquartered in San Francisco, CA, Archblock LLC (formerly Win the Game, Inc., ZenTrusts, Inc., TrustLabs, Inc., and Archblock, Inc.) ("Archblock"), along with its Debtor⁽¹⁾ and non-Debtor affiliates (collectively, the "Company"), was a financial technology company leveraging blockchain infrastructure to build an end-to-end asset tokenization platform (the "Platform").

• The Company's long-term vision was to enable the digitization and on-chain representation of real-world assets, with compliance, transparency, and scalability at its core.

Initial Proof-of-Concept: TrueUSD Stablecoin

In December 2017, as an initial proof-of-concept of the Platform, Archblock incorporated TrueCoin LLC ("TrueCoin") to tokenize US Dollars into stablecoins. The Company launched TrueUSD ("TUSD"), the world's second USD-denominated stablecoin, in March 2018, demonstrating how blockchain technology can be used to tokenize real-world assets.

• Stablecoins are digital currency products meant to maintain a stable value relative to an underlying currency or asset. While most cryptocurrency products are speculative investments, a stablecoin's value is tied to a specific asset, most commonly an underlying fiat currency.
• By investing government-backed dollars into stablecoins, customers receive stable-value blockchain tokens through which they can engage in international cryptocurrency transactions without worrying about large price fluctuations.
• By 2019, TrueCoin had five stablecoins in the market denominated in USD, HKD, GBP, AUD, and CAD, with more on the product roadmap (collectively, "TrueCurrency").

While the stablecoin operations generated credibility and industry traction, they were not the original strategic objective and increasingly consumed operational focus and capital.

TrueFi Platform

In late 2020, Archblock launched TrueFi, a decentralized finance ("DeFi") asset tokenization platform initially designed to tokenize uncollateralized loans, with the ultimate goal of steadily moving upstream in complexity by tokenizing investment funds, real estate, and other assets.

• To finance the development of the Platform, Archblock incorporated TrustToken, Inc. ("TrustToken") as a wholly owned subsidiary to raise capital through an exempt offering of Simple Agreements for Future Tokens ("SAFTs") in 2017 and 2018, issuing native cryptocurrency TRU tokens to early supporters.
• TRU tokens were issued to SAFT purchasers who could use the tokens to manage TrueFi, vote on the issuance of loans, and stake TRU tokens on individual loans as a first loss tranche to absorb initial default losses.

Dormant Subsidiaries

In 2022, to support the rollout of TrueFi's decentralized finance asset tokenization platform, Archblock incorporated TrueTrading 1 GP LLC in May 2022 to act as the general partner and manage the affairs of True Trading-related entities, as well as to serve as Archblock's proprietary credit portfolio manager on the TrueFi Platform. That initiative was abandoned shortly thereafter, and the entity remains dormant.

• TrueCoin II was formed in 2019 to operate as a financial management entity for the Debtors' stablecoin business. The initiative was abandoned shortly thereafter, and the entity remains dormant.
• Archblock (Cayman) was initially incorporated as True Trading in 2018 to manage the Debtors' corporate treasury and operate its proprietary digital asset trading and lending business.

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Corporate History

Archblock was formed in 2017 as a financial technology company leveraging blockchain infrastructure. The Company was initially incorporated in 2017 as Win the Game, Inc. and later operated under the names of ZenTrusts, Inc. and Archblock, Inc., before Archblock, Inc. was converted by merger into Archblock LLC on December 20, 2023.

• TrueCoin LLC was originally incorporated as TrustToken LLC and subsequently changed its name to TrueCoin LLC.
• TrustToken, Inc. was incorporated in 2017 to raise capital through the issuance of Simple Agreements for Future Tokens to fund the development of Archblock's blockchain-based asset tokenization platform.

Organizational Structure

Archblock has seven wholly-owned subsidiary entities organized under the laws of the United States, Gibraltar, and the Cayman Islands. Archblock currently directly owns 100% of the equity in each of the other Debtors.

• Archblock also owns 100% of the equity in non-Debtors TrueTrading Asset Management Ltd., Stablecoin Management System Ltd., and Renaissance Ventures Ltd.
• Additionally, Archblock owns 9.96% of Archblock (Holding) AG, a non-Debtor, and Archblock (Cayman) owns 31.72% of Archblock (Holding) AG.

Ownership

Archblock's largest equity holder is Alex de Lorraine, who holds approximately 55.96% of the outstanding membership interests (8,766,450 units). The next largest holder is William Wolf, who holds approximately 21.43% of the outstanding membership interests (3,357,250 units).

Strategic Investments and Decentralization Efforts

In 2021, Archblock sought to accelerate development and decentralization of TrueFi by acquiring an external business process outsourcing company that provided additional engineering resources to strengthen internal engineering capabilities. The Company also made selective strategic investments in certain business partners to align incentives.

• In 2022 and 2023, Archblock completed the handoff of TrueFi to an external management and development team, further decentralizing the core operations of TrueFi.
• At the same time, Archblock's new business goal was to build centralized layers on top of TrueFi's infrastructure by first building and launching a centralized, enterprise-grade fund management platform using TrueFi's decentralized technology stack (the "Fund Platform").

European Expansion and SEC Settlement

In early 2024, Archblock decided to spin out its non-USD stablecoin platform into a separate Swiss-domiciled corporate group under Archblock (Holding) AG. This move was completed to capitalize on the emerging regulatory certainty in Europe over fiat-backed stablecoins, with the hope that a refocused, non-US corporate group could scale its proven stablecoin technology in the European market.

• In late 2024, without admitting or denying the allegations, TrustToken and TrueCoin settled charges with the SEC relating to the unregistered offer and sale of investment contracts in the form of the crypto asset TUSD and profit-making opportunities with respect to TrueUSD on TrueFi.

Wind-Down

In early 2025, Archblock determined in its business judgment to materially reduce its workforce and begin an orderly wind-down of operations. Archblock (Holding) AG and its subsidiaries also began similar wind-down efforts in 2025.

• Throughout 2025, Archblock focused on ceasing remaining activities, resolving obligations where possible, and selling any non-liquid assets.

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Operations Overview

Sale of TUSD Stablecoin Business

In December 2020, the TUSD stablecoin platform was sold to Techteryx, Ltd. ("Techteryx") for approximately $28 million. Importantly, the transaction included an ongoing services agreement with revenue-sharing components, which was expected to provide a stable and predictable revenue stream to fund the continued development of the original tokenization platform.

Escrow Arrangements and the Aria Fund Investments

In mid-2019, TrueCoin engaged Legacy Trust Company Limited ("LT") as an escrow agent to provide escrow services for the funds underlying the stablecoin currencies. LT later shifted escrow services to its affiliate First Digital Trust Limited ("FDT") in December 2020.

• LT and FDT negotiated for authority to manage certain of the escrow funds on behalf of TrueCoin. Through their retained investment advisor, Yai Sukonthabhund, LT and FDT introduced TrueCoin to the Aria Commodity Finance Fund (the "Aria Fund"), which was pitched as a low-risk, short-term investment fund that provided financing for agricultural transportation.
• TrueCoin invested $97 million initially in the Aria Fund before it sold its TUSD business to Techteryx in December 2020. Techteryx then invested another $468 million in the Aria Fund.
• Techteryx was eventually able to redeem approximately $63 million, leaving just over $500 million outstanding.
• Meanwhile, TrueCoin invested approximately £10,000,000 GBP, $5,000,000 CAD, and $15,000,000 AUD in the Aria Fund from the currencies underlying other stablecoins.
• While TrueCoin was able to redeem certain amounts during this process, approximately £4,129,858.17 and HK $1,280,686.55 remains frozen in the Aria Fund.

Prime Trust Escrow Services

Prime Trust, LLC acted as the escrow agent for certain of the fiat currency backing Archblock stablecoins.

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Prepetition Obligations

Secured Debt

• Archblock LLC has an outstanding secured, non-recourse loan of $195,100.00 from JTSA Global LLC collateralized with TRU tokens.
• No other Debtor has issued secured or unsecured debt instruments or preferred equity to raise capital, and their capital structures consist solely of the membership or equity interests described above.

FTX Claim

• The FTX Recovery Trust alleges that Archblock LLC owed the Trust $8,512,910 (plus unspecified interest and other amounts) as of the November 11, 2022 bankruptcy petition date of FTX and its affiliates' bankruptcy cases (the "FTX Claim").
• No adversary proceeding has been initiated by the FTX Recovery Trust related to the FTX Claim. The parties are currently engaged in informal discussions as certain Debtors have claims against the FTX estates.

IRS Processing Error

• In February 2025, the IRS began making inquiries as to an apparent processing error at the IRS where a FY 2021 tax payment made by Archblock was incorrectly processed and mistakenly issued back to Archblock as a refund.
• The estimated total liability now (including interest and penalties) is $1,300,000.

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Events Leading to Bankruptcy

Strategic and Financial Inflection Point

By mid-2020, Archblock faced a strategic and financial inflection point. The core tokenization platform promised to SAFT purchasers had not progressed at the expected pace due to regulatory concerns and business timing issues. Other tokenization competitors had launched earlier than Archblock and were also not gaining traction on either the supply or demand sides of the business.

• During this time, Archblock was operating with approximately $10 million in assets and a monthly burn rate of roughly $1 million.
• As a result, a management reshuffle occurred: the then-CEO was asked to step aside, and a new CEO was appointed with a mandate to stabilize the business, reduce costs, and refocus on a long-term strategy.

Downsizing and Sale of TUSD Business

Under the new leadership, Archblock undertook a significant downsizing, materially reducing its burn rate and extending its operational runway. To ensure sufficient capital to pursue the original tokenization vision, management initiated the sale of the TUSD stablecoin business — by then a capital-intensive but non-core operation.

Fund Platform Development and Execution Risk

However, building centralized layers on top of TrueFi's infrastructure added complexity and execution risk, particularly as the centralized platform depended on infrastructure that was no longer fully owned or controlled by Archblock.

External Shocks and Partner Failures

In 2023, a series of external shocks materially impaired Archblock's operating environment. Several critical banking and trust company partners collapsed or were shut down, including Silvergate Bank, Signature Bank, and, most significantly, Prime Trust in Nevada.

• The Prime Trust failure created potential liabilities to end users of the TrueCurrency stablecoin products, constraining Archblock's ability to relaunch and expand its non-USD stablecoins.
• As a result, Archblock became almost entirely reliant on revenue generated under the TUSD services agreement with Techteryx while (i) the Fund Platform was built out and (ii) the TrueCurrency stablecoin platform was relaunched.

Aria Fund Default

In late 2022 and continuing into 2023, the Aria Fund began consistently failing to make coupon payments and timely redeem investments. Significant delays had arisen in redemptions and coupon payments, and reporting and information from FDT regarding the Aria Fund was insufficient and inaccurate, leading TrueCoin to suspect that amounts invested in the Aria Fund by TrueCoin and its affiliates may either be largely unaccounted for or illiquid.

• Techteryx also experienced delayed payments, and TrueCoin and Techteryx began investigating the Aria Fund and FDT.
• Eventually, neither TrueCoin nor Techteryx were able to redeem any remaining investments from the Aria Fund or receive any coupon payments.

Failed Fund Platform Launch and Loss of Revenue

By mid-2024, after multiple development iterations, the Fund Platform could not be successfully launched mainly due to regulatory uncertainty in the United States, which materially impacted business development efforts. Compounding this challenge, Techteryx ceased paying several million dollars in outstanding invoices, effectively cutting off Archblock's primary revenue source.

Financial Fraud and Liquidity Crisis

At that time, Archblock held approximately $16 million in assets but faced multiple pending and costly legal matters, including various litigation matters with the Company's ex-CEO, costs and litigation arising from Prime Trust's failure, and a lack of revenue due to Techteryx's non-payment of invoices. Archblock's management undertook another realignment and downsizing, in an effort to conserve capital and focus on two remaining priorities: the development of a new stablecoin platform and the resolution of ongoing legal disputes.

• Fundraising efforts were initiated to support this new strategic direction, and one promising primary funding lead emerged. However, this investment lead turned out to be a sophisticated criminal enterprise working out of Eastern Europe, which ultimately defrauded Archblock of approximately $3 million.
• This loss materially altered Archblock's financial position that could not be remedied through further cost reductions or asset sales. This event also increased Archblock's legal spend as additional outside counsel and investigative resources were brought online.
• The Company engaged an on-chain investigative firm to track the funds, resulting in approximately $237,000 being successfully frozen in various centralized exchanges and stablecoins.

Chapter 11 Filing

Given the combination of external partner failures, loss of its primary revenue stream, unsuccessful product transitions, litigation expenses, and direct financial fraud, bankruptcy became unavoidable. The Company and its affiliates filed for Chapter 11 protection on February 10, 2026, in the U.S. Bankruptcy Court for the District of Delaware.

Key Pending Litigation

As of the Petition Date, the Debtors face several significant ongoing and threatened litigation matters:

Prime Trust Dispute: On August 14, 2023, Prime Trust, LLC and certain of its affiliated entities filed a Chapter 11 bankruptcy petition in the District of Delaware. On November 13, 2023, the Prime debtors filed a motion seeking a declaration that foreign fiat currency worth approximately $9 million that was deposited with Prime by Archblock stablecoin customers be declared to be assets of the bankruptcy estate.

• On November 27, 2023, Archblock opposed the motion arguing, among other things, that funds held by an escrow agent cannot constitute property of the bankruptcy estate under applicable law. Accordingly, Archblock argued that the entirety of the foreign fiat currency held by Prime should be returned to Archblock.
• Resolution of the motion was ultimately adjourned sine die and remains pending to this day.
• In August 2025, counsel for Prime raised additional potential claims against Archblock for alleged preferential and fraudulent transfers to or for the benefit of Archblock. Prime threatened to file a new adversary proceeding against Archblock alleging these preferential and fraudulent transfer claims, as well as seeking a declaratory judgment that the approximately $9 million in fiat currency held by Prime for the benefit of Archblock customers constituted property of the bankruptcy estate.
• Since that time, the parties have been engaged in ongoing discussions to mediate their respective claims against one another.

Celsius Action: On October 17, 2025, Celsius Network Limited ("Celsius"), a former cryptocurrency platform that filed for bankruptcy protection in July 2022, filed a complaint against Archblock, Inc., TrustToken, Inc., and TrueCoin LLC in the United States District Court for the Northern District of California.

• The Celsius complaint alleges that Archblock and its affiliates "promised customers that their deposits would be held securely and risk-free by 'fiduciary partners' in cash or cash-equivalent," but instead "gambled their customers' deposits on risky offshore investments with partners who disclaimed any fiduciary duties." According to Celsius, when they sought to redeem the underlying cryptocurrency, Archblock refused.
• As a result of its allegations, Celsius asserted claims for fraud based on intentional misrepresentation, fraud based on concealment, fraud based on false promises, conversion, money had and received, gross negligence, negligent misrepresentation, breach of contract, breach of fiduciary duty, and violations of California's unfair competition law.
• Celsius is seeking an award of actual damages in the amount of "approximately USD $12.92 million," plus restitution, disgorgement, punitive damages, exemplary damages, all prejudgment interest, and attorneys' costs.
• Debtors deny these allegations and are defending against what they believe to be meritless claims.

FDT Arbitration: TrueCoin initiated a confidential JAMS arbitration against FDT concerning its alleged mismanagement of the TUSD escrow account before the sale to Techteryx and of the non-USD escrow accounts. FDT has asserted a counterclaim for legal fees and has obtained an order requiring TrueCoin to provide significant cash security (representing a portion of the fees FDT allegedly incurred as of the date of the order) as security for FDT's counterclaim.

Techteryx Arbitration: TrueCoin is the claimant in a consolidated confidential arbitration filed with the Singapore International Arbitration Centre ("SIAC") against Techteryx as the buyer of TrueCoin's USD-pegged stablecoin business. TrueCoin seeks damages related to Techteryx's failure to meet payment obligations. Techteryx has filed a counterclaim related to, among other things, the Aria Fund investments from TrueCoin. There has been no final decision.

Hong Kong Litigation: Techteryx joined TrueCoin and its former CEO, Alex de Lorraine, to an action it had commenced against other parties in the High Court of the Hong Kong Special Administrative Region, HCA 1906. Techteryx alleges that TrueCoin is responsible for losses suffered in connection with its investment of escrow funds in the Aria Fund.

• TrueCoin and Mr. de Lorraine dispute the claims in the Hong Kong litigation and applied to the Hong Kong court to stay the case in favor of the consolidated Singapore arbitration. TrueCoin also applied for an anti-suit injunction against Techteryx before the High Court of Singapore.
• In August 2024, the High Court of Singapore ruled in TrueCoin's favor and permanently enjoined Techteryx from pursuing its pending lawsuit against TrueCoin in the High Court of the Hong Kong Special Administrative Region.
• On December 18, 2024, TrueCoin and Techteryx entered into a voluntary stay of claims against TrueCoin based on the anti-suit injunction. On January 17, 2025, the Hong Kong court ruled that the claims against Mr. de Lorraine must also be stayed because they fall under the arbitration agreements.
• The Hong Kong court ruled that TrueCoin and Mr. de Lorraine, whose legal costs were advanced by TrueCoin, are entitled to recover their costs, including legal fees. On August 27, 2025, they demanded Techteryx pay these costs in the amount of HK$6,460,044.00 plus interest which continues to accrue daily. To date, Techteryx has refused to pay. TrueCoin and Mr. de Lorraine intend to commence taxation proceedings in Hong Kong to recover their costs.
• After its claims against TrueCoin and Mr. de Lorraine were stayed in HCA 1906, Techteryx joined TrueCoin to a different pending Hong Kong lawsuit, HCA 161, with substantially similar claims. TrueCoin sought and obtained an Anti-Suit Injunction from the Singapore arbitral tribunal on July 8, 2025, and is not actively litigating in Hong Kong except as to the recovery of costs.

Appraisal Action: On February 7, 2024, Archblock's former CEO Daniel An filed a petition for appraisal of his shares in Archblock, Inc. in Delaware's Court of Chancery (the "Appraisal Action"). The Appraisal Action is in connection with Archblock's 2023 reorganization merger, after which Mr. An purported to serve a demand for appraisal of his alleged shares in Archblock Inc.

• Archblock filed its Answer to Petitioner's Verified Petition on April 2, 2024. The parties have each filed various discovery motions and briefings on those motions concluded in October 2025. The parties are awaiting the court's determination regarding those motions.