An Obscure Stablecoin Is at the Center of Binance Reclamation Efforts

As Binance Holdings Ltd. comes under fire from regulators and industry participants, a relatively obscure stablecoin is playing a key role in the largest crypto exchange’s push to move past its recent turmoil.

(Bloomberg) — As Binance Holdings Ltd. comes under fire from regulators and industry participants, a relatively obscure stablecoin is playing a key role in the largest crypto exchange’s push to move past its recent turmoil. 

TrueUSD, also known as TUSD, is the only stablecoin not branded by the world’s largest exchange where traders don’t have to pay a fee when swapping between cryptocurrencies on Binance’s trading platform. Presently only offered for Bitcoin, all trading pairs involving TrueUSD will benefit from zero maker fees from June 30, Binance said in a statement on Wednesday.

That connection’s made it rather in demand, with the token’s total circulation increasing more than 300% this year alone to $3.1 billion, according to data from CoinGecko. Meanwhile, Binance is TrueUSD’s biggest market, making up at least 70% of the coin’s $496.3 million trading volume in the last 24 hours. 

Read more: Biggest Bitcoin Trading Pair Uses Obscure Stablecoin TrueUSD

Stablecoins like TrueUSD are digital tokens designed to keep a one-to-one value with a less volatile asset like the dollar, typically by holding equal reserves of cash and cash-equivalent assets as collateral. They’re commonly used by traders as a way of transferring funds between exchanges and as a safe haven from price swings, making them some of crypto’s most-traded tokens.

Despite its rise, TrueUSD remains a relatively small player in the stablecoin universe. Though it’s the fifth-largest, its circulation still pales in comparison to larger constituents like Tether Holding Ltd.’s USDT, which had a total market value of around $83.1 billion on Thursday. 

Obscure structure

TrueUSD is operated by Archblock, a San Francisco-headquartered firm with offices in Ireland and Poland. The company, formerly known as TrustToken, sold the intellectual property rights for TrueUSD in late 2020 to British Virgin Islands-incorporated Techteryx Ltd., a relatively unknown investment company. 

But Archblock was hired to continue overseeing TrueUSD from the US on Techteryx’s behalf, however. Techteryx itself operates out of offices in Singapore and Hong Kong, a representative for the firm told Bloomberg News in April, without specifying the names of any of its executives or owners.

The reserves backing TrueUSD receive real-time attestation checks by third-party accountant The Network Firm, which are designed to indicate whether Archblock holds enough cash or cash-equivalent assets to back TrueUSD tokens one-to-one. The availability of that service has been intermittent in recent days, at times unable to display a result when The Network Firm has had trouble confirming the validity of certain data.

Previous attestations showed Archblock held more than half of its reserves with Capital Union Bank, a Nassau-based lender which also provides similar services to Tether. It also named Prime Trust, a US-based custodian which halted withdrawals on Thursday following a collapsed buyout deal, as a partner at that time. 

Read more: Stablecoin Operator Moves $1 Billion in Reserves to Bahamas

Minting of TrueUSD via Prime Trust has been suspended since one of the latter’s partners Binance.US, an American exchange operating under Binance’s branding, was sued by the US Securities and Exchange Commission earlier this month. Archblock’s Chief Financial and Operating Officer Alex de Lorraine declined to comment on its partnership with Prime Trust and TrueUSD’s recent rise in circulation.

An attestation released on Thursday now anonymizes Archblock’s partner custodians. As its largest exchange partner, Binance holds more than 90% of all TrueUSD tokens that are currently in circulation, according to wallet information compiled by Arkham Intelligence. 

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