TrueUSD’s Banking Partner Falls: Will It Impact TrueUSD’s Stablecoins?

Adam Cochran, a marketing expert, and Information Technology expert raised questions about the dollar-backed stablecoin project TrueUSD which recently assured that TUSD had “no exposure” to the beleaguered crypto custodian Prime Trust. Referring to an email sent by TrueUSD to its users, Cochran pointed out the disparity in the team’s statements, as the mail revealed the repercussions of Prime Trust’s suspension of operations.

In a tweet on June 23, Cochran called into question TUSD’s suspension of minting and redeeming TUSD and other TrueCoins including TAUD, TCAD, and TGBP.

According to a June 21 statement released by Nevada’s Department of Business and Industry, Prime Trust’s financial condition is “critically deficient,” and has a “shortfall in customer funds.” Prior to Nevada regulators’ claims against Prime Trust, its subsidiary Banq filed for bankruptcy in the US bankruptcy court in Nevada.

Following the reveal of the crumbling conditions of Prime Trust, TrueUSD took to Twitter to assure its community that its funds were safe and the stablecoin was “unaffected by the situation.” Nonetheless, Cochran came forward with the mail which highlighted the impact of Prime Trust’s fall on TUSD.

Cochran shared a screenshot of the mail, which read:

We are reaching out to you to inform you that our banking partner, Prime Trust, is halting all deposits and disbursements. Unfortunately, this means that you will be unable to mint and redeem TUAD as well as any of our TrueCoins including TAUD, TCAD, and TGBP while Prime Trust’s operations are suspended.

Responding to Cochran, TrueUSD wrote on Twitter that to counter the uncertainty of Prime Trust, the platform has paused PT minting for more than one week. The platform announced the pause of minting operations on June 10, asserting that the halt has been declared in the interest of the community.