crvUSD

United

Wrapped Bitcoin

TrueUSD

Curve Finance, a decentralized exchange (DEX), is considering dropping TrueUSD (TUSD) from the list of tokens serving as collateral for Curve Stablecoin (crvUSD) after United States regulators charged TrueCoin, TUSD’s issuer, with securities law violations.&nbsp;
In a Sept. 25 <a data-ct-non-breakable="null" href="https://gov.curve.fi/t/reduce-tusd-pegkeeper-debt-ceiling-to-0-and-pyusd-to-5m/10306" rel="null" target="null" text="null" title="null">post</a> on Curve’s governance forum, cross-chain messaging protocol Wormhole proposed reducing the upper limit on crvUSD’s TUSD backing to zero “to fully remove exposure to TUSD due to regulatory risk and solvency concerns.”&nbsp;
The “PegKeeper” liquidity pool backing crvUSD permits users to mint up to $10 million worth of crvUSD with TUSD.
The proposal also suggested reducing the amount of crvUSD mintable with PayPal’s stablecoin, PYUSD, from $15 million to $5 million “so reliance on each PegKeeper is suitable for the significance of the respective pool.”&nbsp;
On Sept. 24, the US Securities and Exchange Commission (SEC) <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-settles-truecoin-trusttoken-trueusd-fraud" rel="null" target="null" text="null" title="null">settled charges</a> against TrueCoin and TrustToken for fraudulent and unregistered sales of investment contracts involving TrueUSD.
<figure>
 <img alt="Curve mulls dropping TUSD as crvUSD backing after SEC charges" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01922a9a-c899-7bb5-aa8b-2f58f0b34c25">
 <figcaption style="text-align: center;">
 Current crvUSD backings and proposed changes. Source: <a data-ct-non-breakable="null" href="https://gov.curve.fi/t/reduce-tusd-pegkeeper-debt-ceiling-to-0-and-pyusd-to-5m/10306" rel="nofollow noopener" target="_blank" text="null" title="https://gov.curve.fi/t/reduce-tusd-pegkeeper-debt-ceiling-to-0-and-pyusd-to-5m/10306">Curve</a>
 </figcaption>
</figure>
Related: <a data-ct-non-breakable="null" href="https://cointelegraph.com/news/sec-settles-truecoin-trusttoken-trueusd-fraud" rel="null" target="null" text="null" title="null">SEC settles charges against TrueCoin, TrustToken over TrueUSD&nbsp;</a>
Among other charges, the SEC’s complaint alleges that “TrueCoin and TrustToken falsely marketed the investment opportunity as safe and trustworthy by claiming that TUSD was fully backed by U.S. dollars or their equivalent,” <a data-ct-non-breakable="null" href="https://www.sec.gov/newsroom/press-releases/2024-145#:~:text=Without%20admitting%20or%20denying%20the,civil%20penalties%20of%20%24163%2C766%20each" rel="null" target="null" text="null" title="null">according</a> to a Sept. 24 announcement.
“[I]n fact, a substantial portion of the assets purportedly backing TUSD had been invested in a speculative and risky offshore investment fund to earn additional returns for the defendants,” the SEC said.&nbsp;
The complaint alleges that “99% of the reserves backing TUSD were invested in the speculative fund” as of September 2024.&nbsp;
TrueCoin and TrustToken did not admit or deny the allegations but consented to final judgments enjoining them from further violations of applicable federal securities laws and requiring them to pay civil penalties of $163,766 each.
<figure>
 <img alt="Curve mulls dropping TUSD as crvUSD backing after SEC charges" name="" src="https://s3.cointelegraph.com/uploads/2024-09/01922a9b-a6d8-7fde-b0c7-207336d81aa7">
 <figcaption style="text-align: center;">
 Top crvUSD collateral tokens. Source: <a data-ct-non-breakable="null" href="https://resources.curve.fi/crvusd/understanding-crvusd/" rel="nofollow noopener" target="_blank" text="null" title="https://resources.curve.fi/crvusd/understanding-crvusd/">Curve</a>
 </figcaption>
</figure>
Curve’s crvUSD stablecoin is mintable against several types of cryptocurrency collateral, including Ether (<a data-ct-non-breakable="null" href="https://cointelegraph.com/ethereum-price" rel="" target="_self" text="null" title="https://cointelegraph.com/ethereum-price">ETH</a>) and Wrapped Bitcoin (<a data-ct-non-breakable="null" href="https://cointelegraph.com/wrapped-bitcoin-price-index" rel="" target="_self" text="null" title="https://cointelegraph.com/wrapped-bitcoin-price-index">WBTC</a>).&nbsp;
At more than $68 million in total value locked, WBTC makes up the greatest portion of crvUSD’s collateral backing. Wrapped Staked Ether (wstETH) — a liquid staking derivative issued by Lido Finance — comes in second, at around $60 million in TVL, according to Curve’s documentation.&nbsp;
“crvUSD is overexposed to minor stablecoins, especially TUSD, which has a dubious track record and has recently been charged by the SEC with defrauding investors,” the Sept. 25 proposal said.&nbsp;
“Ultimately, Curve requires a strong diversity of PegKeepers, but that is another discussion.”
Magazine: <a data-ct-non-breakable="null" href="https://cointelegraph.com/magazine/justin-suns-sui-farming-sins-pepes-wild-run-3acs-oyster-philosophy-asia-express/" rel="null" target="null" text="null" title="null">Justin Sun’s SUI-farming sins, PEPE’s wild run, 3AC’s oyster philosophy: Asia Express</a><advertisement>
 <advertisement>
 <advertisement>
 <template data-name="subscription_form" data-type="defi_newsletter" label="Subscription Form: DeFi Newsletter"></template>
 <advertisement>
 <advertisement>
 
 </advertisement>
 </advertisement>
 </advertisement>
 </advertisement>
</advertisement>

Curve mulls dropping TUSD as crvUSD backing after SEC charges

Cointelegraph

Other articles published on Sep 25, 2024

Floki's Valhalla Partners with Esports Giant Alliance

Bybit Launches BUIDL Apprenticeship to Foster Crypto Talent

Coinpedia Fintech News

Gary Gensler SEC’s ‘Historically Destructive, Lawless Chairman’?

eToro Limits U.S. Crypto Offerings to BTC, ETH, and BCH After $1.5M SEC Settlement

BingX Exchange Hit by $26M Crypto Theft: Report

Join our free newsletter for daily crypto updates!