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TrueUSD Stablecoin Has $26k of Funds at ‘U.S. Depository Halting Withdrawals,’ Reserve Report Says
The stablecoin issuer said last week that it had “no exposure” to the failed crypto custodian Prime Trust.
Updated Jun 28, 2023, 5:08 p.m. Published Jun 27, 2023, 6:44 p.m.
TrueUSD (TUSD) stablecoin had a small amount of funds at a U.S. depository institution that was ordered to halt withdrawals, according to the token’s reserve report.
Attestation provider The Network Firm’s examination revealed on June 23 that $26,434 worth of TUSD backing assets “were held at a U.S. depository institution which has communicated to customers that the institution has been ordered by state regulators to halt deposits and withdrawals for fiat and digital asset accounts.” It added that $26,269 of the funds “relate to customer withdrawals for redeemed tokens.”
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A TrueUSD spokesperson said that the particular balance relates to fund withdrawal by users for redeemed coins – burned coins that no longer belong in TUSD circulation – so it is not TUSD asset by legal or token definition.
The Network Firm didn’t specify the U.S. institutions where the funds were held.
TUSD issuer previously said that it had “no exposure” to the imploded crypto custodian Prime Trust, which acted as the stablecoin’s banking partner in the U.S. The issuer tweeted it paused minting tokens via Prime Trust on June 10, adding that “minting and redemptions services remain unaffected” through other banking rails.
Prime Trust halted withdrawals and was ordered by Nevada state regulators to cease operations on Thursday due to a “shortfall in customer funds,” CoinDesk reported. The regulator subsequently said on Tuesday that it filed to take over the custodian and freeze all of its businesses.
PrimeTrust has suspended all deposits of fiat and digital assets. #TrueUSD (#TUSD) is not affected by this situation. We have no exposure to Prime Trust and maintain multiple USD rails for minting and redemption. Rest assured, all your funds are safe with TUSD.
— TrueUSD (@tusdio) June 22, 2023
TUSD is the fifth largest dollar-pegged stablecoin with a $3.1 billion market capitalization, and a key piece of infrastructure for crypto market liquidity as the new favored stablecoin trading pair on crypto exchange Binance. The token’s intellectual property was acquired by a little-known Asian investor called Techteryx, while Archblock acts as an agent to manage the stablecoin.
UPDATE (Jun. 28, 17:03): Adds comment from TrueUSD spokesperson.
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