Prime Trust and TrueUSD Controversy: What is happening?

TrueUSD's recent developments have raised concerns about the safety and reliability of the platform. With Prime Trust facing a potential bankruptcy, customers are unable to use the True ecosystem stablecoins as intended.

The TUSD stablecoin network has recently experienced several troubling developments, raising concerns about the safety and reliability of the stablecoin. Despite claims from TUSD that everything is fine, the network has paused all mints and redemptions, leaving customers unable to redeem or mint stablecoins from the True ecosystem. We’ll take a look at what’s happening…

Current State

Bitco, a cryptocurrency custody firm, was set to acquire Prime Trust, has announced that it will not be acquiring Prime Trust, with which TUSD had partnered. Prime Trust has reportedly experienced a shortfall of customer funds, which has prompted the Nevada regulator to step in and investigate.

The potential bankruptcy of Prime Trust could have a significant impact on the cryptocurrency industry. The company provides financial infrastructure for several crypto companies, including wire transfers and banking services. The situation could affect the operations of these companies and their customers.

TrueUSD, a stablecoin designed to be pegged to the US dollar, has recently printed a billion stablecoins just before the suspension of Prime Trust's services. This has raised concerns about the transparency and reliability of the platform. TrueUSD is printing billions of stablecoins that cannot be redeemed.

Relation Binance & Justin Sun

The ongoing lawsuit in the United States involving Prime Trust has raised concerns about the involvement of Binance and Justin Sun. Both parties have been accused of potentially manipulating the markets to gain support. Additionally, Binance has been offering preferential treatment to the platform by enabling free wash trading according to some and the ownership structure of TUSD remains unclear and appears to lead back to Tron founder Justin Sun.

Pausing all deposits

Despite claims that everything is fine, the network has paused all mints and redemptions.

Also TrueUSD (TUSD) stablecoin has recently sent emails to its customers stating that redemptions are suspended due to Prime Trust's failure. This is in contrast to their public claims that they have no exposure.

"you will be unable to mint and redeem TUSD as well as any of our TrueCoin’s including TAUD, TCAD, and TGBP while Prime Trust operations are suspended."

Impact on Customers

The recent developments have left customers unable to use the True ecosystem stablecoins as intended. Auditors have pulled the "management ripcord," indicating unacknowledged representations or assertions, raising concerns about the transparency of TUSD's ownership structure and reserves. It is thus unclear what investments or instruments TUSD reserves may include, which can further increase uncertainty for customers.

Should you be Concerned?

Holders of TrueUSD should be concerned about these developments and carefully evaluate the risks and potential consequences of depegging. As with any investment, it is essential to conduct thorough research, assess the risks, and only invest what you can afford to lose.

Conclusion

The controversy surrounding Prime Trust and TrueUSD has raised concerns about the safety and reliability of another big stablecoin in the cryptocurrency industry. The potential bankruptcy of Prime Trust and its ripple effect could affect more players than previously mentioned, such as FTX, Voyager, and others. More time is needed to determine what is true and what is not, and most importantly, how the market is going to react.

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