TUSD Depeg Due To TrueUSD Reserves Audited By FTX.US Collapsed

Key Points:

• TrueUSD’s Reserve Certificate has been audited by the former FTX.US accounting team.
• The Network Firm, formerly known as Armanino and worked with Sam Bankman-Fried (SBF) for FTX.US to perform the audit.
• In December last year, the accounting firm Armanino ended its crypto audit business and abandoned the client.

According to CoinDesk, the certificate of reserve of the troubled stablecoin TrueUSD was audited by The Network Firm, formerly Armanino, and worked with Sam Bankman-Fried (SBF) for FTX.US to perform the audit.

At the beginning of March this year, a group of former FTX accountants, US Auditors Armanino, set up shop as The Network Firm to provide audit, attestation, and related work for crypto clients.

Armanino, an accounting firm of FTX.US, has ended its crypto audit business and abandoned its clients. The reason is that other clients in the industry consider Armanino’s reputational risk to question their audit results and put pressure on it. This firm is also the accounting firm for crypto exchanges such as Gate, OKX, and Kraken. Reportedly, Armanino began providing support to the crypto industry in 2014, including proof of reserve audits and evidence of stablecoins.

After the FTX incident broke out, American investors sued Prager Metis and Armanino, the auditors of FTX, accusing them of conspiring to commit extortion.

Executives at Archblock, which powers the TUSD stablecoin, previously confirmed the Armanio team in emails to CoinDesk and said they would continue using The Network Firm.

Earlier today, the community stirred with the rate of TUSD in Curve’s 4pool surpassing the 70% mark, and the stablecoin is showing a slight depeg signal.

This case is reminiscent of Curve’s 3pool USDT rate crossing the 50% mark on June 15, not long ago, resulting in USDT being depeg for a short period of time.

Looks like a similar situation is playing out with TUSD. The community speculates that something is going on with TUSD or that someone has some “insider” information about the stablecoin. So we are simultaneously converting TUSD to safer stablecoins like USDC, USDT, and DAI.

This makes the trading price of the TUSD/USDT trading pair on Binance.US at $0.9007, shortly after hitting as low as $0.8. On the Binance platform, the pair is trading at around $0.9992.

In fact, it can be seen that TUSD is in a difficult situation when its main partner, Prime Trust, is in trouble. Prime Trust is a USD deposit and withdrawal partner for TrueUSD, so since mid-June, TrueUSD has suspended deposit and withdrawal activities through Prime Trust.

Despite claiming to be “unaffected”, the community still found signs that users could no longer convert TUSD to USD. Some people even received emails from TUSD claiming that TUSD could not be issued or redeemed.

Nevada’s Division of Financial Institutions has now submitted the Prime Trust to take over and freeze all of its businesses in a severe capital shortfall.

DISCLAIMER: The information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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