Home Coin news TrueUSD Loses Dollar Peg and Crashes

TrueUSD Loses Dollar Peg and Crashes

16 Jan, 2024 Coin news

TrueUSD Loses Dollar Peg and Crashes

The stablecoin TrueUSD (TUSD), associated with Justin Sun, has recently dropped below its $1 peg.

This decline comes amidst reports that substantial amounts of TUSD are being exchanged for the competing stablecoin, Tether.

Around January 15, at 11:00 am UTC, TUSD's value dipped to as low as $0.984 and is currently at $0.988, which is 1.3% less than its target $1 peg, according to CoinMarketCap.

This devaluation coincides with a significant increase in TUSD sales on the cryptocurrency exchange Binance.

As of the latest data, traders have sold over $339.2 million of TUSD in the past 24 hours on Binance, surpassing the $296.8 million in purchases. This results in a net outflow of $42.3 million.

On January 10, there were reports indicating that TrueUSD was struggling to provide real-time attestations for its reserves, raising concerns about potential undercollateralization.

A report from Protos on January 10 mentioned issues with TrueUSD's API, which failed to assign a U.S. dollar value to its collateral assets.

The problems with TUSD were initially highlighted by a user under the pseudonym Rho Rider in a post on December 16. Rho Rider noted a potential arbitrage opportunity with TUSD, which had been trading at about 8% under its peg at $0.92 on Poloniex, while maintaining a relatively stable $0.99 on Binance.

Rho Rider posed the question, “The big [question] is why isn’t anyone taking the nearly 10% arb?”

They concluded that the most likely reason was the inability of users to withdraw or deposit TUSD on Poloniex, making the arbitrage trade unfeasible.

Users on Crypto X have also theorized that the large-scale sell-off might be linked to TUSD not being included in Binance’s Manta (MANTA) launch pool initiative.

Sources:

https://cointelegraph.com/news/tusd-stablecoin-depeg-justin-sun-binance-launchpool-true-usd

https://protos.com/trueusd-attestations-paused-again-this-time-for-improper-balances/

https://twitter.com/NoCryptFish/status/1745081696930660483

https://twitter.com/RhoRider/status/1735900701979443688

https://twitter.com/adamscochran/status/1747038561151439031

https://twitter.com/RhoRider/status/1734678022664642936

https://coinmarketcap.com/currencies/trueusd/

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