TrueUSD’s Depegging from $1 Raises Concerns and Speculation in the Crypto Market
TrueUSD (TUSD) has depegged from its long-standing value of $1 following an announcement of the temporary suspension of TUSD minting through Prime Trust. The news has caused a stir in the cryptocurrency market, leaving investors and traders speculating about the implications.
TrueUSD took to Twitter to communicate the development, stating, “TUSD mints via Prime Trust are paused for further notification. Thanks for your understanding, and we are sorry for any inconvenience.” The tweet further assured users that TUSD minting and redemption services would continue to operate normally, with partnerships with banking institutions intact to facilitate seamless transactions.
TUSD mints via Prime Trust are paused for further notification.
Thanks for your understanding and we are sorry for any inconvenience. Please contact [email protected] for any further questions.
— TrueUSD (@tusdio) June 10, 2023
The ability to mint and redeem TUSD tokens will reportedly remain unaffected by the changes, with TrueUSD emphasizing their commitment to providing a reliable and efficient service to meet users’ TUSD needs.
Stablecoin TUSD gained popularity as an alternative to Binance’s BUSD, which faced scrutiny from the U.S. Securities and Exchange Commission (SEC) and subsequently had its issuance halted by Paxos in February 2023. Binance later endorsed TUSD by offering free Bitcoin transactions for trading pairs involving this stablecoin. However, concerns have arisen regarding TUSD’s alleged association with controversial cryptocurrency figure Justin Sun.
With a current market capitalization of $2 billion, TUSD has experienced significant growth compared to its $800 million mark at the beginning of 2023.
Reasons behind TrueUSD’s Decision TrueUSD has not provided a specific reason for suspending its minting services through Prime Trust, the company responsible for providing custodial services to cryptocurrency firms.
However, the main speculated reason revolves around Prime Trust’s rumored financial distress and its purported acquisition agreement with BitGo on June 9, 2023. This comes despite Prime Trust raising over $100 million in funding in June 2022. Other speculations suggest that the suspension could be related to the recent legal action taken by the U.S. Securities and Exchange Commission (SEC) against major crypto exchanges Binance and Coinbase. The SEC lawsuit references “Trust Company B,” leading many to believe it refers to Prime Trust. The company’s Crunchbase profile lists its headquarters in Nevada, where Trust Company B is also located.
Prime Trust’s involvement goes beyond Binance.US, as it was known to have collaborated with FTX before the exchange’s collapse in November 2022. Although not directly impacted by the lawsuit, FTX’s affiliated investment fund, Alameda Research, was mentioned in the SEC’s 136-page complaint, highlighting a significant “relationship” between Binance.US and Alameda Research in the past.
Prime Trust began providing services to cryptocurrency companies in 2018 and served nearly 700 customers in the fintech and crypto industries last year.
The suspension of TUSD minting via Prime Trust has raised questions about the future of the stablecoin and its potential impact on the broader cryptocurrency market. As the situation continues to unfold, users and investors are advised to stay updated and consult TrueUSD’s customer support for any further questions or concerns.
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