TrueUSD Faces Instability As Holders Offload $330 Million In TUSD

TrueUSD stablecoin depegs, falling to $0.984 amid a massive sell-off and reserve attestation issues.

Why did TrueUSD depeg?

TrueUSD (TUSD), a stablecoin linked to Justin Sun, has experienced a significant depegging event, deviating from its $1 peg. This occurrence is marked by a substantial volume of TUSD being sold in favor of Tether (USDT).

TUSD's Depegging And Market Reaction

Around January 15, TUSD's value dropped notably below its $1 peg, reaching a low of $0.9841 at 11:15 pm UTC. As of the latest updates, TUSD is trading at $0.9854, a 1.5% fall from its intended peg. This depegging coincides with a considerable selling activity of TUSD on the cryptocurrency exchange Binance, where more than $339.2 million worth of TUSD has been sold in the past 24 hours, compared to $296.8 million in purchases, resulting in a net outflow of $42.3 million.

Reserve Attestation Challenges And Arbitrage Opportunities

Reports on January 10 highlighted difficulties TrueUSD faced in providing real-time attestations of its reserves, raising concerns about potential undercollateralization. Protos reported multiple errors with TrueUSD's API, hindering the ability to verify the US dollar value of its collateral assets.

TrueUSD attestations paused again, this time for improper ‘balances’
TrueUSD, a dollar-pegged stablecoin connected to Justin Sun, have paused its attestations, citing a ‘balances’ issue.

This issue was first brought to light on mid December, when a pseudonymous user on X/Twitter identified a significant arbitrage opportunity, noting TUSD's lower trading value on Poloniex.

Implications For TrueUSD And Exchange Limitations

As per recent updates from the Poloniex Telegram group, users are still facing difficulties withdrawing TUSD from the exchange. This situation is further compounded by speculations on crypto X/Twitter that the exclusion of TUSD from Binance’s Manta (MANTA) launch pool initiative may have contributed to the sell-off.

Awaiting Official Responses And Market Outlook

TrueUSD and Poloniex have not yet provided official comments on these developments. The situation underscores the fragility of stablecoins and the importance of maintaining confidence in their peg to underlying assets. As the market reacts to these unfolding events, the focus remains on TrueUSD's ability to restore its peg and the broader implications for stablecoin stability in the cryptocurrency ecosystem.


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