TrueUSD (TUSD), a cryptographic stablecoin issued by the Chinese company Techteryx Ltd, seems to be on track to recover its peg with a value of 1 dollar, after showing unusual downward volatility at the beginning of the week.
At the time of writing the article, the currency prices are at 0.991 dollars, but they even reached a minimum of 0.9685 during the night, causing fears and panic among crypto investors.
The reasons for the latest dump could be related to an unconfirmed rumor about problems with redeeming TUSD and difficulties in cashing out in fiat currency.
Let’s see all the details below.
Summary
TrueUSD (TUSD) aims to recover the peg and returns to 99 cents
Today the stablecoin TrueUSD (TUSD) seems to want to recover the peg with the dollar, initially lost at the beginning of the week.
On Monday, January 15th, in the early morning, the currency strangely started to lose quotations until closing the day with a token value of 0.985 dollars, more than 1% away from the price it should refer to.
TUSD holders have started to worry about the loss of the peg, thinking that it could suffer the same fate as UST, Terra/Luna’s stablecoin that crashed to a few cents in May 2022.
Last night there was another downward jolt that brought TrueUSD to touch the level of 0.9685 dollars, resulting in an overall drawdown of 3% from the 1 dollar mark, which was then reversed in the following hours.
In fact, from 4 o’clock onwards (UTC+1) there was a total absorption of the overnight crash, which brought the stablecoin to almost fully recover its peg.
In the next few hours, it is likely that parity with the US dollar will be definitively regained, bringing the situation back to normal.
Behind the unusual price movements of TrueUSD, we see how the trading data offered by the cryptocurrency exchange Binance, indicate that traders have sold $303.5 million worth of TUSD against $129 million worth of purchases, generating a net negative flow of $174.5 million.
Many claim that TUSD is somehow linked to Justin Sun, billionaire founder of Tron Foundation, although there are no reported holdings in the Hong Kong company Techteryx Ltd.
In this regard, Arkham Intelligence, a provider of advanced on-chain data, has just reported the presence of a $60 million transfer from an address belonging to Justin Sun to Binance.
Shortly after, the same Sun’s address received back several million dollars in TUSD, as evidence that the Tron’s boss evidently bought the stablecoin to support its price.
The data from Arkham also highlights a supposed strong connection with Binance wallets that hold a significant amount of TrueUSD’s circulating supply
Also note how in the morning there were inflows to the same exchange for $1.8 million in TUSD.
Some companies report problems with redeeming the stablecoin and alert investors
Initially, the loss of the TrueUSD (TUSD) peg was related to two specific reasons.
On one hand, it was thought that the recent Poloniex hacks and HTX, a company owned by Justin SUN, could have had a negative indirect effect on the stablecoin, as the billionaire is possibly linked to the management of the currency.
On the other hand, Binance, which until recently had supported TUSD with various initiatives such as discounts on trading fees and incentives for holders, has stopped accepting the stablecoin as a currency for farming its projects in the launchpool phase. Launchpool.
The FDUSD currency has been preferred instead, favoring positive flows over TUSD.
However, tonight’s dump, with which the currency issued by Techteryx Ltd reached the local maximum amplitude of depeg, would have nothing to do with these previous ones.
The reason, according to what is reported by Condesk, would be found in the frustration of companies that have encountered problems in redeeming their TUSD requests in fiat currency.
This has caused a crisis of trust that quickly turned into a rush to sell those who could on the TUSD market.
The inability of stablecoin holders to redeem their stablecoins in dollars is a critical problem for stablecoin issuers which in this case has led to a lack of trust in the market.
The spokespersons of TrueUSD have not responded to any comment request, and at the same time, the details of the failed redemption and the reasons that have caused these issues are not known.
While the graphical situation of TUSD’s price seems to be resolved, with the return to the peg now almost certain, worrying rumors emerge for the stablecoin and its issuer, which, unlike industry leaders like Tether, show lack of transparency within their operations.
In order for TUSD to survive in the long term, it is crucial that more details are brought to light by its managers, allowing investors to have more confidence in the project.
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