Curve Finance Considers Removing TrueUSD (TUSD) From Its List of Support Tokens

Curve Finance, a decentralized exchange for trading stablecoins (DEX), is considering removing TrueUSD (TUSD) from the list of support tokens for its own Curve USD (crvUSD).

Curve Finance (CRV), a decentralized exchange for stablecoins, is considering removing TrueUSD (TUSD) from the list of supported tokens for its own Curve USD (crvUSD). The move comes amid concerns over the stability of TUSD.

The exchange is also planning to reduce the issuance of crvUSD backed by the PayPal stablecoin (PYUSD) from $15 million to $5 million, as stated in the proposal, which was recently put forward by diversification strategies.

«crvUSD is heavily concentrated in the smaller stablecoins, notably TUSD, which has a poor reputation and was recently accused by the SEC of defrauding investors,» said the proposal, submitted by a user named WormholeOracle.

Currently, users can mint up to $10 million in crvUSD using TUSD via a liquidity pool—a smart contract into which users can deposit cryptocurrencies to help operate the decentralized exchange called PegKeeper. Typically, the liquidity pools for USDC/USDT were the main and most useful in PegKeeper to maintain the peg of 1 crvUSD to $1.

Curve’s crvUSD stablecoin can be minted against several cryptocurrencies, including Ethereum (ETH) and Wrapped Bitcoin (WBTC).

What's up with TrueUSD (TUSD)?

The proposal to decouple crvUSD from TrueUSD (TUSD) comes after TrueCoin, the original issuer of TUSD, faced a number of legal allegations.

On September 24, the U.S. Securities and Exchange Commission (SEC) accused TrueCoin and TrustToken of lying to investors about the stability of TrueUSD (TUSD) while making risky, unregistered sales.

According to the press release, TrueCoin and TrustToken lied about TUSD being fully backed by US dollars, when in fact they had invested most of their reserves in a high-risk offshore fund and 99% of TUSD reserves were tied to this speculative fund, but the companies continued to mislead investors. TrustToken was behind a supposed lending protocol called TrueFi.

The SEC alleges that back in March 2022, after TrueCoin sold its TUSD operations to an offshore company, this company, along with TrueCoin, placed over $500 million of TUSD reserves in this speculative fund.

Amid the accusations, TrueUSD (TUSD) is no longer as stable and has begun to lose its peg to $1. But it is still holding on.

Incidentally, this is not the only stablecoin that has been at the center of negative attention. Tether, the issuer of USDT, has once again been accused of non-transparent activities.

Obmify is a reliable Ukrainian crypto exchange monitoring service that offers favorable rates for exchanging cryptocurrencies, fiat, and money from various payment systems. The platform ensures secure and fast exchanges, backed by an insurance deposit for extra protection. Users can enjoy the convenience of a unique mobile app, allowing them to trade from anywhere at any time.