TrueUSD pauses minting of TUSD via Prime Trust, stablecoin briefly depegs

On Jun 10, 2023

TrueUSD (TUSD) has halted the minting of TUSD stablecoin tokens via fintech infrastructure provider, Prime Trust, causing a brief depegging.

TrueUSD pauses minting of TUSD on Prime Trust

In a June 10 post on its verified Twitter account, TrueUSD informed its users that the minting of TUSD tokens via Prime Trust had been temporarily paused until further notice.

Announcement:
TUSD mints via Prime Trust are paused for further notification.
Thanks for your understanding and we are sorry for any inconvenience. Please contact [email protected] for any further questions.
— TrueUSD (@tusdio) June 10, 2023

Despite this temporary pause in minting services, TrueUSD has assured its users that the redemption services for TUSD tokens will continue to operate without interruption. It means that users can still redeem their TUSD tokens as usual.

The stablecoin startup confirmed that its partnerships with other banking institutions remain intact, enabling continued user transactions.
TUSD’s announcement wasn’t immune to “repercussions,” as the stablecoin dropped below its dollar peg shortly after the revelation to trade at $0.9963.

Prime Trust facing challenges

The stablecoin issuer has not revealed its decision to stop minting on Prime Trust. However, it comes in the wake of several challenges facing Prime Trust in recent times.

The company reportedly laid off a significant portion of its staff in January and later stepped in to safeguard Binance.US customer funds following a banking crisis in March.

Prime Trust was also embroiled in a controversy in Oregon last year when it was revealed that a $500,000 contribution to the state Democratic Party originated from FTX executive Nishad Singh.

Rumors and concerns about Prime Trust’s financial stability began circulating earlier this week when customers of Binance US, Abra, and Swan experienced delays in withdrawing their bitcoin holdings, which Prime Trust held.

Bitcoin Magazine CEO David Bailey warned users to withdraw their bitcoin (BTC) from exchanges.

I will say again. Anyone who has any bitcoin on any platform needs to withdraw it now. Doesn’t matter what they tell you.
— David Bailey🇵🇷 https://redeemGBTC.com (@DavidFBailey) June 8, 2023

These rumors prompted speculation about Prime Trust’s financial situation, including the possibility of raising $25 million before a June 11 deadline.

However, on June 8, BitGo, a leading wallet infrastructure provider and digital asset custodian, announced its intention to acquire Prime Trust.

The agreement, which is currently non-binding, holds the potential for BitGo to acquire Prime Trust’s payment rails and cryptocurrency IRA fund, expanding its wealth management offerings.

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