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The significant outflow could be attributed to TrueUSD’s January 10 report, where the company informed users about a full upgrade to their fiat reserve audit system in collaboration with the Hong Kong-based accounting firm MooreHK.
TrueUSD ($TUSD), a stablecoin supposedly associated with Chinese-born crypto entrepreneur Justin Sun, has been on a downward trajectory since January 15, depegging from its 1:1 benchmark to the US dollar.
The stablecoin, which was supposed to maintain its stability at all times, even in the face of market volatility, dropped slightly below the $1 value to $0.984 on Monday following reports of users dumping their holdings for its rival stablecoin, $USDT.
TrueUSD Stablecoin Drops to $0.9708 Before Slightly Recovering
On Thursday morning, the token dropped to as low as $0.9708 in Hong Kong before sharply recovering to $0.9723 at around 11:15 a.m. in Asia.
However, at press time, the stablecoin has continued towards regaining its $1 peg, now trading at $0.9893 with a market capitalization of $1.89 billion, according to CoinMarketCap data.
The depegging comes as traders are selling their $TUSD holdings on Binance, the world’s largest cryptocurrency exchange in the industry.
In the past 24 hours, Binance data shows that users have dumped approximately $238.3 million worth of TrueUSD through the $TUSD-$USDT trading pair. Concurrently, buyers made purchases amounting to about $83.8 million, resulting in a net outflow of approximately $154.5 million.
On January 15, the exchange recorded a total net outflow of around $42.3 million after users sold over $339.2 million worth of the stablecoin with a buy order of $296.8 million in $TUSD.
$TUSD Dropped Nearly 10% on Poloniex
The significant outflow could be attributed to TrueUSD’s January 10 report, where the company informed users about a full upgrade to their fiat reserve audit system in collaboration with the Hong Kong-based accounting firm MooreHK.
The firm also said in a statement that the enhanced attestation report now provides additional details about the reserve funds held by its financial and fiduciary partners.
Before this report, a pseudonymous member of the crypto community raised concerns on X (formerly Twitter), suggesting that TrueUSD might be undercollateralized as it faced difficulties posting real-time attestation of its reserve.
That same day, Protos reported that TrueUSD encountered issues with its API, unable to provide a US dollar value for its collateral assets.
However, a different member of the crypto community first drew attention to TrueUSD’s situation in a December 16 post on the Elon Musk-owned social media platform.
⚠️ $TUSD continues its march down off the Peg on Poloniex, while market cap dives
It’s doing ~$3M/day volume on there (prob wash traded). Meanwhile the price on Binance remains fairly steady.
The big ❓ is why isn’t anyone taking the nearly 10% arb?#JustinSunIsSetting https://t.co/qCUEZebLuk pic.twitter.com/oTo3JTPvnH
— Rho Rider (@RhoRider) December 16, 2023
The user, with the name Rho Rider, revealed that the token had been trading below its supposed $1 peg at $0.92 for weeks on Poloniex, while maintaining a seemingly stable price of around $0.99 on Binance.