TrueUSD stablecoin has $26k funds at a US depository that has halted withdrawals, according to a reserve report.
The TrueUSD (TUSD) stablecoin had a small amount of funds in a U.S. depository institution that was ordered to stop withdrawals, as stated in the token’s reserve report.
An examination by the attestation provider, The Network Firm, on June 23 revealed that $26,434 worth of assets backing TUSD “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 was added that $26,269 of the funds “relate to customer withdrawals for redeemed tokens.”
The Network Firm did not specify the U.S. institutions where the funds were held.
However, the TUSD issuer previously stated that it had “no exposure” to the collapsed crypto custodian Prime Trust, which was the stablecoin’s banking partner in the U.S. The issuer tweeted that it paused minting tokens via Prime Trust on June 10, adding that “minting and redemptions services remain unaffected” through other banking rails.
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The token’s issuer did not respond to multiple requests for comment.
Prime Trust halted withdrawals and was ordered by Nevada state regulators to cease operations on Thursday due to a “shortfall in customer funds,” blockchain 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 is 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.
Edited by Aoyon Ashraf.