TrueUSD (TUSD), a stablecoin, has faced controversy leading to a price drop on the Binance.US exchange. As a result, the stablecoin has been depegged.
One of the concerns with stablecoins, cryptocurrencies pegged to a fiat currency, is the risk of instability. Unfortunately, TrueUSD (TUSD) has recently faced this issue, with the stablecoin trading at a lower value of approximately 10% below its $1 peg on the Binance.US exchange.
On the Binance.US exchange, the TUSD/USDT trading pair is showing a price of $0.9007, a decrease of approximately 10% from the $1 peg. Meanwhile, on the Binance exchange, this stablecoin is trading at $0.9984.
“Parrot Capital,” a Twitter user with over 16,000 followers, believes that depegging often starts from Binance.US and spreads to other exchanges. They wrote:
“Peg usually breaks the strongest there (Binance.US) first and then spreads to other places.”
However, other users have criticized Parrot Capital for using Binance.US as a benchmark. Another user tweeted:
“Binance US has experienced liquidity issues. You can’t use it as a benchmark.”
Recently, Binance.US experienced a liquidity crisis, causing the price of Bitcoin to surge to over 138,000 USD on June 21st. The platform’s market share dropped below 0.7%.
The community has discovered that FTX’s auditor, Armanino, rebranded as “The Network Firm” following FTX’s collapse. Since TUSD had collaborated with the same auditor for FTX, this stablecoin is facing strong backlash from the community.
Lately, incidents of stablecoin depegging have become quite frequent. On June 15th, the largest stablecoin, USDT, experienced a price drop due to significant selling pressure. However, USDT quickly recovered after the depegging incident.