Stablecoin TrueUSD Drops Below Dollar Peg
Stablecoin TrueUSD (TUSD) experienced a drop in value, falling to around $0.9708. Although it has slightly recovered, trading at approximately $0.9723, this decline is significant. The stablecoin’s drop below its U.S. dollar peg occurred as holders reportedly sold off hundreds of millions worth of TUSD. Data from Binance shows that there was a net outflow of around $154.5 million, with users selling $238.3 million and purchasing $83.8 million worth of TrueUSD via the TUSD-USDT trading pair.
Possible Reasons for the Drop
The drop in value may be attributed to several factors. Firstly, TrueUSD paused its real-time attestations of its reserves on January 10, raising suspicions about the company’s ability to collateralize tokens. However, the company later clarified that the pause was due to internal errors. Additionally, the recent announcement of Binance’s launchpool program and the need to stake other stablecoins like TUSD for MANTA tokens might have led investors to sell off TrueUSD.
Connection to Poloniex Breach
TrueUSD, which is believed to be associated with TRON founder Justin Sun, may have also been affected by the recent $100 million security breach on Sun’s cryptocurrency exchange Poloniex.
Improved Fiat Reserve Audit System
TrueUSD announced that it has upgraded its fiat reserve audit system in partnership with Hong Kong-based accounting firm MooreHK. The upgraded attestation report provides additional details about the reserve funds held by its financial and fiduciary partners.
Hot Take: TrueUSD Faces Challenges and Market Volatility
The recent drop in value and concerns about TrueUSD’s ability to collateralize tokens highlight the challenges faced by the stablecoin. Market dynamics, liquidity adjustments, and external factors such as security breaches can significantly impact its performance. While the stablecoin has recovered slightly, it remains to be seen how it will navigate these challenges in the future.
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