TrueUSD (TUSD), the fifth-largest cryptocurrency by market capitalization, briefly lost its peg earlier today. Peckshield Alert shared a TUSD chart that showed the moment TUSD deviated from its dollar parity and printed a long red candlewick.
In the process, TUSD fell beneath its one-dollar peg to reach lows near $0.9951 before recovering. At the time of writing, TUSD goes for $0.9984.
In recent hours, TrueUSD announced that TUSD mints via Prime Trust are paused until further notice. It adds that TUSD minting and redemption services remain unaffected and will continue to operate as usual as long as its partnership with other banking institutions remains intact.
TUSD announced its minting via Prime Trust are paused for further notification. TUSD is currently supported by JustinSun and Binance.— Wu Blockchain (@WuBlockchain) June 10, 2023
TUSD said its minting and redemption services remain unaffected its partnerships with other banking institutions remain intact.…
Likewise, the ability to mint and redeem TUSD tokens will not be impacted by these changes.
In 2018, TrueUSD announced its partnership with professional trust companies, including Alliance Trust Company of Nevada and Prime Trust, to manage the escrow accounts that hold the TrueUSD collateral.
TrueUSD saw immense growth in the earlier part of the year after Binance's BUSD stablecoin saw a regulatory crackdown in the U.S. In late February, Binance minted $130 million worth of TUSD within a week.
Prime Trust under acquisition
Prime Trust has recently been the subject of discussion, with some online speculation suggesting that the firm might be facing insolvency.
This might have informed the move by TrueUSD to suspend TUSD mints via the company. According to recent reports, cryptocurrency custody firm BitGo has reached a preliminary agreement to buy Prime Trust.
An official blog post discloses that BitGo has signed a non-binding term sheet to acquire 100% of the equity of Prime Core Technologies, Inc., the parent company of Prime Trust. Prime Trust's Nevada Trust Company will join BitGo's existing global network of regulated trust companies in South Dakota, New York, Germany and Switzerland.