According to CoinGecko, TrueUSD (TUSD) has witnessed a remarkable surge in market capitalization, doubling to $3 billion since March. This achievement ranks TrueUSD as the fifth-largest stablecoin in the market. Additionally, data analysis firm Kaido reports a significant increase in TUSD’s trading volume on cryptocurrency exchanges, jumping from less than 1% at the beginning of the year to 20%.
Nevertheless, the identities of the project’s supporters remain undisclosed.
The origins of TrueUSD trace back to March 2018 when crypto entrepreneurs Rafael Cosman and Daniel Jaiyong established TrustLabs in San Francisco. Eventually, the company was rebranded as Archblock and secured funding from notable entities such as Peter Thiel, StartX of Stanford University, Andreessen Horowitz, and Jump Trading.
In December 2020, Archblock sold the intellectual property rights associated with TrueUSD to a relatively unknown company named Techteryx. During this time, Archblock continued to oversee TUSD tokens, including storage, banking partnerships, and regulatory compliance. However, Techteryx seemingly vanished from the online sphere by July 2021. In a post from the same year, Rafael Cosman described Techteryx as an Asia-based corporation involved in real estate, entertainment, environment, and information technology. To this day, the true identity of the TUSD manager remains concealed.
Clara Medalie, Research Director at Kaiko, highlights the risks associated with stablecoins managed by unidentified entities. Despite TrueUSD’s relatively lower significance in the cryptocurrency ecosystem, millions of users worldwide continue to trade using this stablecoin.
In a recent legal dispute, Daniel Jaiyong An alleged that cryptocurrency tycoon Justin Sun had agreed to acquire TrueUSD in 2020. However, An was removed from the CEO position of TUSD’s parent company before the transaction could be finalized.
Conversely, Justin Sun, the founder of Huobi exchange, denies any involvement with TrueUSD or Techteryx. Speculation within the crypto community suggests that Sun might be responsible for artificially inflating the value of TUSD, which has seen significant growth in recent months.
Justin Sun is presently under scrutiny by the US government due to allegations of crypto price manipulation and the offering of unregistered securities.
Analysts are also predicting Binance’s involvement in the stablecoin, as more than 90% of TUSD is circulating on the exchange, according to data from Arkham Intelligence. The rally of TUSD began in March after Binance waived Bitcoin trading fees with TrueUSD, prompting users to rush and buy TUSD.
Austin Campbell, an adjunct professor at Columbia Business School, expressed his genuine curiosity about Binance’s business strategy and their decision-making process. Having previously worked for Paxos, a former partner and stablecoin issuer with Binance, Campbell opines that the world’s largest cryptocurrency exchange has given TrueUSD priority status.
Binance asserts that it has never signed an agreement with Sun or anyone else to promote TrueUSD. The push to boost TUSD’s prominence comes as the exchange faces increasing financial and regulatory pressure. Previously, Binance attempted to expand the influence of BUSD, its own stablecoin but was subsequently banned by regulators. Since then, BUSD’s market capitalization has dropped from $23 billion to $3.4 billion.
Recently, Binance announced that it would waive Bitcoin trading fees with a lesser-known stablecoin called First Digital USD. This token is issued by First Digital Labs, based in Hong Kong. A spokesperson for the company states that Binance consistently favors transparent stablecoins that are strictly regulated by financial institutions and banks. TUSD is the first of several new stablecoins expected to serve the crypto community.
Regulators are pushing for maximum transparency in stablecoins. Some of these projects are backed by traditional assets such as bonds, USD, and gold. Consequently, stablecoin volatility directly impacts the market. If stablecoin owners sell off their holdings, issuers will need to sell traditional assets to fulfill customer payments. In the worst-case scenario, some issuers who lack sufficient collateral as pledged may go bankrupt. Last year, Terra’s UST disaster served as an expensive lesson for the crypto market.
Two months ago, USDT, the world’s largest stablecoin, experienced a slip in its peg, causing panic throughout the community. At that time, many feared a recurrence of the crisis faced by Do Kwon’s Terraform Labs. However, USDT regained its peg a few days later.