TrueUSD Says TUSD Stablecoin Has ‘No Exposure’ to Embattled Prime Trust

Traders are still making multi-million dollar bets on a depeg, however.

AccessTimeIconJun 22, 2023 at 4:37 p.m. UTC
Updated Jun 23, 2023 at 3:56 p.m. UTC

Stablecoin project TrueUSD said Thursday it had “no exposure” to embattled crypto services company Prime Trust as it raced to shore up confidence in its dollar-backed TUSD.

Nevada-based Prime Trust on Thursday shut off all fiat and crypto deposits and withdrawals following an order from state financial regulators, according to multiple clients whose money is now stranded.

TrueUSD has said it no longer uses Prime Trust to mint or redeem the TUSD stablecoin and maintains “multiple USD rails” elsewhere. The usually stable asset has fallen as low as $0.995 and climbed as high as $1.003 since June 9, when Prime Trust’s financial crisis began to deepen.

That volatility has rocked usually quiet loan markets for TUSD, especially on Aave v-2, the largest on-chain lending facility for TUSD. At press time, the variable borrow rate for TUSD was over 30% APR; it was even higher earlier in the day, according to Parsec.

The hefty rates were not dissuading traders betting that TUSD could depeg in major fashion. Less than an hour before TrueUSD’s statement, one trader placed what amounted to a multi-million dollar short on TUSD by borrowing $2 million in the stablecoin against $2.5 million in USDC collateral.

Edited by Nelson Wang.


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Danny Nelson

Danny is CoinDesk's Managing Editor for Data & Tokens. He owns BTC, ETH and SOL.