In Techteryx Ltd v First Digital Trust Ltd & Ors [2025] HKCFI 4032, a stablecoin provider (Techteryx) sought the appointment of receivers over interests its Hong Kong custodian (FDT) had in US$456m of investments made on Techteryx’s behalf in a commodities investment Fund operating out of Cayman and Dubai.
Techteryx contended that payments to Dubai were unauthorised and that relief was needed to (i) prevent the Fund “securitising” its assets, said to be tantamount to dissipation, (ii) restrain dissipation in Cayman and (iii) facilitate its intended application to wind up the Fund in Cayman. The Dubai International Finance Court, before which proceedings remained on foot, had granted Worldwide Freezing relief over the Dubai payments / investments.
The Court declined to appoint receivers in Hong Kong broadly for want of utility, observing that (§38-51):
(1) risk of dissipation was already averted by the Dubai Court’s Injunction;
(2) appointment would not prevent securitisation, since the order would not have proprietary effect over the investment assets nor confer on FDT any power to dictate what the Fund could do with its assets;
(3) if the Dubai Orders did not extend to Cayman, and relief over assets in Cayman was required, Techteryx ought to have sought injunctive relief there; and
(4) appointment would not facilitate winding up in Cayman (i) since the Grand Court had ruled as much and (ii) given Techteryx’s case that an application was still open to it on the just and equitable ground.
In those premises and in light of potential prejudice to FDT’s business, the Court concluded that the status quo ante would not be better preserved pending trial, by appointment.
The Court further declined to grant a proprietary injunction over US$15.5m said to have been paid by way of “illicit kick back” to a trust account maintained by another Hong Kong custodian (Legacy Trust) in the name of an entity (Glass Door) associated with the investment adviser (§63-69).
First, because there was scant evidence of the payments in question. Bare assertions in the Dubai evidence of the individual responsible for the Fund were insufficient. Second, in light of Legacy Trust’s own evidence that less than US$20,000 remained in the trust account. Third, since Legacy’s Trust’s business would be prejudiced by a freezing order that could affect monies of its other clients. And fourth, since Techteryx could be adequately compensated by damages.
Finally, the Court declined to join Glass Door as a defendant for (inter alia) want of adequate pleadings in knowing receipt and dishonest assistance (§71-76).
The Decision is helpful reading for anyone looking for updates or a refresher on (i) the nature and limits of receivership (ii) the evidential requirements for grant of a proprietary injunction or (iii) the pleadings requirements for knowing receipt and dishonest assistance.
It can be read here.
Prince’s Chambers Josh Baker (led by Tim Parker SC of Temple Chambers) appeared for FDT and Legacy Trust, instructed by Amita Haylock of Mayer Brown. Laurence Li SC, Martin Ho and Sik Chee Ching appeared for Techteryx. Frances Lok SC and Kwan Ping Kan appeared for Glass Door.
