TrueUSD stops minting via Prime Trust, loses dollar peg

The recent depeg comes as the TrueUSD team announced a pause on TUSD minting through Prime Trust until further notice.

Stablecoin TrueUSD (TUSD) lost its dollar peg in the early hours of June 10 after a pause in minting activities through its technology partner Prime Trust. 

The fifth-largest stablecoin by market capitalization traded at $0.9964 at its lowest point. According to CoinMarketCap, its value is $0.9981 at the time of writing. The current supply of TUSD is $2.04 billion, while its collateral is $2.08 billion, data from LedgerLens shows.

Announcement:

TUSD mints via Prime Trust are paused for further notification.

Thanks for your understanding and we are sorry for any inconvenience. Please contact support@trueusd.com for any further questions.

— TrueUSD (@tusdio) June 10, 2023

The recent depeg comes on the heels of an announcement from TrueUSD, which reported that the minting of TUSD via Prime Trust was paused until further notice. TUSD minting and redemption services via other banking partners remain unaffected. “We want to assure you that our partnerships with other banking institutions remain intact, allowing for seamless transactions,” the announcement says.

The stablecoin has repeatedly lost its United States dollar peg over the past 12 months.

It’s unclear if the halt in minting is related to recent rumors of insolvency surrounding Prime Trust. The company — a fintech infrastructure provider based in Nevada — laid off a third of its staff in January. It was also acting as a middleman for Binance.US, holding its customer funds through banking partners amid the debanking of crypto businesses in the United States.

Prime Trust is set to be purchased in a deal with crypto custodian BitGo. According to an announcement on June 8, BitGo signed a nonbinding letter of intent to acquire the company. With the deal, BitGo will acquire Prime Trust’s payment rails and cryptocurrency IRA fund, allowing it to expand its wealth management services. The terms of the agreement were not disclosed.

The potential acquisition comes as the U.S. Securities and Exchange Commission proposes rule changes limiting crypto companies’ ability to act as a customer’s custodian.

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