TrueUSD stops minting via Prime Trust, loses dollar peg

The recent depeg comes as TrueUSD team announced a pause on TUSD minting through Prime Trust until further notice.

Stablecoin TruedUSD (TUSD) slightly lost its dollar peg in the early hours of June 10, following a pause in minting activities through its technology partner Prime Trust. 

The fifth-largest stablecoin by market capitalization traded at $0.9964 at its deepest point. According to CoinMarketCap, its value is $0.9981 as of this writing. The current supply of TUSD is $2.04 billion, while its collateral is $2.08 billion, data from LedgerLens shows.

Announcement:

TUSD mints via Prime Trust are paused for further notification.

Thanks for your understanding and we are sorry for any inconvenience. Please contact support@trueusd.com for any further questions.

— TrueUSD (@tusdio) June 10, 2023

The recent depeg comes on the heels of an announcement from TrueUSD team, reporting that minting of TUSD via Prime Trust was paused until further notice. TUSD minting and redemption services via other banking partners remains unaffected. „We want to assure you that our partnerships with other banking institutions remain intact, allowing for seamless transactions,“ says the statement.

The stablecoin has repeatedly lost its USD peg over the past 12 months.

It’s unclear if the halt in minting is related to recent rumors of insolvency surrounding Prime Trust. The company, a fintech infrastructure provider based in Nevada, laid off a third of its staff in January. It was also acting as a middleman for Binance.US, holding its customer funds through banking partners amid the debanking of crypto business in the United States.

Prime Trust is set to be purchased as a deal is in the works with crypto custodian BitGo. According to an announcement on June 8, BitGo signed a non-binding letter of intent to acquire the company. With the deal, BitGo will acquire Prime Trust’s payment rails and cryptocurrency IRA fund, allowing it to expand its wealth management services. The terms of the agreement were not disclosed.

The potential acquisition comes as the U.S. Securities and Exchange Commission is proposing rule changes limiting the ability of crypto companies to act as a customer’s custodian.

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