Because of the latest decision by the Binance crypto exchange, TrueUSD stablecoin depegged from $1 value.
TrueUSD (TUSD) is a very less popular stablecoin. In late 2022, the TUSD market cap was $755 million and now to this day is $2.5 billion. This stablecoin is fully based on the fiat reserve. The backend company TrustToken holds TUSD reserves in third-party escrow accounts without direct access.
In mid of the last month, Binance announced BTC- TUSD zero fee trade support on the platform, and that resulted in a very big boost for the TUSD stablecoin.
Between 30 April to 3 May, TUSD stablecoin saw significant buy pressure in the crypto sector because of the surging demand for this stablecoin.
TUSD was trading at $1.20 on 1 May but later the team somehow managed the situation via more liquidity.
Recently Tron (TRX) founder Justin Sun also transferred $50 million worth of TUSD on the Binance exchange to make money via Binance LaunchPool Sui token framing but Binance CEO Changpeng Zhao (CZ) warned him to keep his funds away from Binance LaunchPool. CZ explained that whales are not allowed to participate in token airdrops.
Later Justin confirmed that one of his team members mistakenly used a small portion of funds to farm on the exchange and also confirmed that his team reversed the decision.
Binance, BUSD, & TUSD
In Feb 2023, Binance stablecoin (BUSD) issuer Paxos Trust received a Wells notice from the United States Securities and Exchange Commission (SEC) citing a violation of securities laws by the company under the BUSD stablecoin business. And later New York financial watchdog NYDFS ordered Paxos to not mint new BUSD supply in the market.
Binance was using BUSD as a top stablecoin in its ecosystem but the regulatory pressure on Paxos forced Binance to shift to other best stablecoin like USDT, USDC.
Now the zero-fee Bitcoin trading on the Binance exchange is a kind of hint that Binance is going to establish a partnership with TUSD issuer TrustToken.
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