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Following the recent decoupling of TrueUSD (TUSD) from the US dollar, the team behind the stablecoin issuer is proudly highlighting its robust trading volume. This development has sparked concerns among TUSD holders, who are already wary of the recent collapse of Prime Trust, a crucial custodian for TUSD.
On Binance US, TUSD experienced a dip in value during early trading hours on Wednesday, dropping to 80 cents against the US dollar. As of the time of writing, it has stabilized around 90 cents to the dollar. CoinGecko data indicates that TUSD’s total market capitalization remained steady initially before plummeting by nearly $100 million.
Notably, the majority of this $100 million reduction can be attributed to a single wallet on the Tron blockchain. The wallet in question dumped approximately $74 million worth of TUSD, as confirmed by the blockchain analysis platform Whale Alert.
A stablecoin, such as TUSD, is a type of cryptocurrency whose value is pegged to a stable asset, typically the US dollar. It offers holders a sense of confidence, assuring them that their stablecoins can be redeemed reliably with minimal risk of value depreciation compared to other cryptocurrencies.
In response to the news of TUSD’s depegging, TrueUSD took to Twitter to promote its trading volumes without directly addressing the decoupling. The issuer shared data highlighting TUSD’s 30-day trading volume and concluded the tweet with a new hashtag, #TUSDKeepGrowing.
Amid the fluctuations of TUSD, some moves seemed to bet against the token amidst the prevailing uncertainty. Kraken, a prominent cryptocurrency exchange, announced on Twitter that it would enable customers to gain exposure to TUSD without actually owning it. This could be done by transferring collateral currencies to a futures wallet on Kraken’s platform.
New perpetual live:
✔ TUSD/USD
Gain exposure to USD-denominated $TUSD without owning the underlying asset. Transfer any of 19 collaterals to your Futures wallet to get started.*
Explore futures in Kraken Pro:
*Geo restrictions apply pic.twitter.com/32d7GQN5GB
— Kraken Pro (@krakenpro) June 28, 2023
A “Relatively Stable” Situation
Dessislava Aubert, a senior analyst at market research firm Kaiko, acknowledged that there were signs of TUSD selling but suggested that the situation was relatively stable. Aubert attributed this stability to Bitcoin-TUSD trades and the recent support provided by Binance, which introduced zero fees for trading Bitcoin pairs and TUSD specifically on June 22.
However, Aubert emphasized that TUSD’s recent challenges primarily stemmed from a “confidence crisis” triggered by growing concerns surrounding Prime Trust, one of its banking partners.
The issues with Prime Trust started when TUSD announced a temporary pause in minting through the custodian on June 10, leading to a sell-off that caused TUSD to lose its peg. The concerns escalated on June 22 when Nevada regulators issued a “cease and desist” order against Prime Trust. A week later, the state requested the complete shutdown of the custodian, citing its inability to repay hundreds of millions owed to clients.
Initially, TrueUSD downplayed the concerns surrounding Prime Trust. In a tweet last Friday, the issuer reassured users that it had no exposure to Prime Trust and that TUSD holders were secure. However, on the same day the cease and desist order was issued, TrueUSD informed customers that the minting and redemption of TUSD and other True Coins would be temporarily suspended.
-> As attested by their sketchy auditor.
-> Still doesn't address that no one can redeem or mint
-> The Network Firm *IS* the spinout of the Armanino accounting team after Armanino shuttered operations (https://t.co/0ySk5waVuG)— Adam Cochran (adamscochran.eth) (@adamscochran) June 28, 2023
Adding to the complications was the backlash on Crypto Twitter following a report commissioned by TrueUSD and compiled by The Network Team. The report claimed that TrueUSD had only a minimal exposure of slightly over $26,000 to Prime Trust. However, users expressed skepticism towards this claim, particularly due to concerns surrounding the credibility of the auditor. Previously known as Armanino, the audit firm had failed to detect flaws in the accounting and financial reporting practices of the now-defunct exchange FTX. After FTX’s collapse, members of the audit team left the company and rebranded as TheNetwork Team in March, as reported by CoinDesk.
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