The stablecoin continues to stave off depegging as its market cap sheds hundreds of thousands persistently.
TrueUSD, the stablecoin issued by Techteryx, is sliding from its $1 peg whereas its market capitalization drops as hypothesis swirls that Justin Solar is utilizing it to money out onto different cryptocurrencies.
TUSD dropped to as little as $0.96 on Jan. 26, the bottom since Might. 2021, in keeping with Coingecko. The stablecoin briefly reached $0.99 at present, buying and selling for $0.98 at present. TUSD’s market capitalization has persistently dropped since November, shedding $100M in market cap each few days. The stablecoin’s market cap is down 58% to $1.6B from $3.8B previously three months.
The de-peg started final week amid a wider market sell-off, though TUSD had different components impacting its value. Actions on Binance’s Launchpool, which in keeping with TrueUSD, have been neighborhood mining actions that led to arbitrage alternatives, additionally brought on the token to lose its $1 peg. The actions have been a part of regular market dynamics and liquidity changes, mentioned the corporate’s ‘X’ account.
Troubles surrounding TUSD’s peg with the US Greenback additionally occurred in June 2023, when merchants started shorting the stablecoin as crypto custodian Prime Belief started to break down. Prime Belief shut down withdrawals and deposits for the stablecoin, forcing TUSD’s then-issuer, TrueUSD, to droop mints on the platform on Jan. 09. On two events, the stablecoin dropped beneath $1, slipping to a low of $0.993 on Jan.10 and 14.
As we speak’s de-peg additionally stems from the alleged ties between Tron founder Justin Solar, who has been accused of utilizing it to purchase Bitcoin and ETH in massive portions at present on Binance.
TrueUSD, previously referred to as TrustToken, was relaunched in March 2018 and totally acquired in 2023 by a little-known Asian-based conglomerate, Techteryx. TUSD is a 1:1 USD-backed stablecoin that gives dwell on-chain attestations.
Justin Solar has been largely related to TUSD after the crypto entrepreneur minted $800M of the token, or 25% of its complete provide, on Tron. He later transferred the funds to 2 accounts on HTX, previously referred to as Huobi, a crypto change that Solar controls.
Crypto investor Adam Cochran identified that Solar’s change, HTX, turned off their proof-of-reserves web site this Friday. It stays offline as of writing. Proof of Reserves is a cryptographic technique that proves a platform holds the required reserves for it to ensure withdraws, deposits, and common functioning.
Lack of transparency in HTX reserves impacts TUSD due to the alleged shady dealings behind the stablecoin and the platform–together with its founder, Justin Solar and now-detained Binance founder, Changpeng Zhao.
Not solely is the focus of TUSD on Binance and JustLend suspicious, but additionally the timing of TUSD mints coinciding with massive sell-offs from Bitcoin, in keeping with crypto analyst Dylan LeClair.
Justin Solar, HTX, and True USD didn’t instantly reply to a request for remark from The Defiant.
Cochran additionally singled out a disparity in reporting from DefiLlama and HTX’s personal audits–though the latter can’t be confirmed. In response to Cochran, DefiLlama exhibits roughly $120M in ETH belongings, whereas HTX’s final audit claimed to carry $300M.
A Dune dashboard of HTX’s belongings showcases $1.55B in complete balances.
