Justin Sun’s TrueUSD trades below $0.97 amidst selling on Binance
TrueUSD (TUSD), the stablecoin linked to crypto entrepreneur Justin Sun, continue to trade below its $1 peg, trading around $0.9723 in Hong Kong.
This depegging follows a net outflow of the coin on Binance, with reports indicating that holders have been exchanging large amounts of TUSD for Tether (USDT).
In the last 24 hours, Binance data revealed a net outflow of approximately $154.5 million in TrueUSD. Users reportedly sold around $238.3 million worth of TUSD, while purchases amounted to $83.8 million. This situation has raised concerns about the stability and collateralization of TrueUSD.
Adding to these concerns were reports that TrueUSD had paused real-time attestations of its reserves. This pause led to speculations about the stablecoin’s ability to fully collateralize its tokens. However, TrueUSD later attributed this incident to internal errors.
On its part, TrueUSD said it upgraded its fiat reserve audit system in collaboration with the Hong Kong-based accounting firm MooreHK. The new attestation report is said to include more details about the reserve funds held by its financial and fiduciary partners.
The selling pressure on TrueUSD has been linked to the recent announcement of MANTA in Binance’s launchpool program, which requires staking BNB or FDUSD. This has reportedly led many investors to sell TUSD in favor of participating in the launchpool staking.
TrueUSD has remarked that the short-term mass arbitrage following the Binance Launchpool program is a part of normal market dynamics and liquidity adjustment. Nevertheless, the significant selling volume of TUSD on Binance, totaling a net outflow of $42.3 million in the last 24 hours, has contributed to the stablecoin’s depegging event.
Additionally, the recent $100 million security breach on Poloniex, a cryptocurrency exchange associated with Justin Sun, may have further impacted investor confidence in TrueUSD. Justin Sun, also the founder of Tron, offered the hackers a 5% ‘white hat bounty’ to return the stolen funds before involving law enforcement.
Justin Sun was also charged by the US Securities and Exchange Commission with market manipulation, fraud, and other offenses. Additionally, eight celebrities, including actress Lindsay Lohan and rapper Soulja Boy, have been accused of unlawfully promoting Sun’s crypto assets.