Key Takeaways
- Traders have reportedly sold over $339.2 million worth of TUSD in the last 24 hours on Binance
- Speculation arose that the stablecoin might be undercollateralized, contributing to the depegging
Amidst a backdrop of regulatory uncertainties, TrueUSD (TUSD), a stablecoin associated with blockchain entrepreneur Justin Sun, has experienced a drop below its $1 peg. Reports suggest that holders are opting to cash out hundreds of millions of dollars’ worth of TUSD in favor of the competitor stablecoin, Tether.
The depegging event occurred around January 15, with TUSD reaching as low as $0.984 at 11:15 pm UTC. The current TrueUSD price stands at $0.9875 USD, marking a departure from its peg.
This shift in TUSD’s value coincides with a notable surge in selling volume on the popular cryptocurrency exchange Binance. Traders have reportedly sold over $339.2 million worth of TUSD in the last 24 hours on Binance, surpassing buy orders by $42.3 million.
Concerns regarding TrueUSD’s stability surfaced on January 10 when reports indicated difficulties in posting real-time attestations of its reserves. Speculation arose that the stablecoin might be undercollateralized, contributing to the ongoing sell-off.
A Protos report revealed that TrueUSD’s API encountered errors, preventing the system from providing a real-time U.S. dollar value for its collateral assets. Pseudonymous user Rho Rider had earlier highlighted potential arbitrage opportunities due to TUSD trading below its peg on Poloniex.
The arbitrage opportunity, however, was hindered by users’ inability to withdraw or deposit TUSD on Poloniex, making the trade impractical. TrueUSD had been trading at nearly 8% below its peg at $0.92 on Poloniex, while maintaining a relatively steady price of around $0.99 on Binance.
The intensified selloff of TUSD suggests panic among holders, driven by uncertainties regarding its reserves and instability associated with Poloniex. Nick Ruck, Chief Operating Officer of ContentFi Labs, emphasized the impact of recent developments, stating, “It feels like such a little catalyst, but with the recent announcement of MANTA in Binance’s launch pool program and the need to stake BNB or FDUSD, it seems that a horde of investors are selling the latter for the former.”
Justin d’Anethan, Head of APAC Business Development at crypto market maker Keyrock, suggested that the recent launch pool program on Binance and the preference for other stablecoins like FDUSD may be contributing to the sell-off.
