TrueUSD Falls Below $1 Peg Amidst Heavy Sell Off and Underfunding Concerns
Summary:
TrueUSD (TUSD), a stablecoin linked to Justin Sun, has dipped below its supposed $1 equivalent, with significant sell-offs in exchange for rival stablecoin, Tether (USDT). This sell-off activity taking place on the Binance platform has resulted in a net outflow of $42.3 million. Additionally, recent reports allege that TUSD may be underfunded, a concern fueled by difficulties in displaying real-time account backing. The inability of users to withdraw or deposit TUSD on Poloniex is speculated to have limited potential arbitrage trades. TUSD's non-inclusion in Binance's Manta (MANTA) launch pool might also have contributed to the massive sell-offs.
TrueUSD (TUSD), a stablecoin associated with Justin Sun, has dipped below its par value of $1 amid rumors that holders are redeeming large amounts of TUSD for rival stablecoin, Tether (USDT). The noticeable drop beneath its peg happened roughly at 11:00 am UTC on Jan. 15, bottoming out at $0.984 by 11:15 pm. As of now, TUSD is being traded at $0.988, which is 1.3% short of its standard $1 peg according to statistics from CoinMarketCap. Heavy selling activity on Binance started after midnight on Jan. 15, which led to the peg devaluation. CoinMarketCap data shows that a substantial volume of TUSD sales was observed on the Binance platform, with over $339.2 million TUSD traded against $296.8 million bought in the past 24 hours. This results in a net outflow of $42.3 million. Recent reports on Jan. 10 suggested issues with the real-time endorsement of TUSD reserves, hinting that the stablecoin might be underfunded.
A report from Protos on Jan. 10 noticed numerous API errors and a failure to provide an equivalent value in U.S. dollars for its underlying assets. An anonymous user, Rho Rider, first spotlighted TUSD issues in a Dec. 16 post, indicating a potential arbitrage opportunity for TUSD. TUSD had been trading around 8% below its peg at $0.92 for weeks on Poloniex, while its value held steady at roughly $0.99 on Binance. Rho asked why no one was taking advantage of this almost 10% arbitrage trade. Rho deduced that the most likely reason is the inability of users to withdraw or deposit TUSD on Poloniex, thus making the arbitrage opportunity unattainable. Cointelegraph had sighted messages on the Poloniex Telegram group indicating the ongoing inability to withdraw TUSD from the exchange, and although attempts have been made to obtain comments from both TrueUSD and Poloniex, none have been received so far. Several Crypto X users have speculated that the excessive sell-off may be tied to TUSD's omission from the Manta (MANTA) launch pool on Binance.
Published At
1/16/2024 3:59:58 AM
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