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.

AccessTimeIconJun 27, 2023 at 6:44 p.m. UTC
Updated Jun 28, 2023 at 5:08 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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.”

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.

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.

Edited by Aoyon Ashraf.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.

Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.