In a new setback for the world’s largest cryptocurrency exchange, Binance, the issuance of TrueUSD (TUSD) has been put on hold through crypto custodian Prime Trust. This development follows the recent turmoil surrounding Binance, including the legal charges brought against the exchange and its CEO, Changpeng “CZ” Zhao, by the US Securities and Exchange Commission (SEC).
On June 10, TrueUSD announced that the minting of TUSD through Prime Trust has been paused, posing additional problems for Binance. It’s worth noting that Binance had turned to support TrueUSD after the US regulatory authorities ordered Paxos to cease minting Binance USD (BUSD) stablecoin.
Despite this development, TrueUSD assured its users that the minting and redemption services for TUSD remain unaffected and will continue to function normally. The company emphasized that its partnerships with other banking institutions remain intact, ensuring the seamless execution of TUSD transactions.
“TUSD minting and redemption services remain unaffected and will continue to operate as usual. We want to assure you that our partnerships with other banking institutions remain intact, allowing for seamless transactions”
TUSD Reserves and Collateral Status
Most TUSD reserves are held in Prime Trust, First Digital, Capital Union, Manual, and BitGo. The real-time reserve balance of TUSD currently stands at 2.50 billion tokens, with USD-denominated collateral in accounts totaling $2.08 billion.
Prime Trust has encountered various difficulties in the wake of the bear market and the intensified regulatory scrutiny faced by the US crypto industry. The custodian has been associated with FTX and its executives, downsized its workforce by one-third in January, and began holding Binance customers’ funds through partner banks in March.
Amid speculation regarding Prime Trust’s financial stability, rival custodian BitGo has reportedly reached a preliminary agreement to acquire the struggling company.Crypto Market Witnessed Significant Liquidation
The cryptocurrency market experienced a substantial crash due to tight market conditions following the SEC’s lawsuits against Binance and Coinbase. Market makers such as Jump Crypto and Cumberland withdrew all liquidity from altcoins, contributing to a massive $2 billion liquidation of altcoin positions, possibly orchestrated by hedge fund Scimitar Capital.
Over the past 24 hours, more than $350 million worth of cryptocurrencies have been liquidated, marking one of the largest-scale liquidation events in the history of the crypto market. The prices of Bitcoin and Ethereum declined by more than 4% and 5%, respectively, during this period, with expectations of further decline during US market hours.