TrueFi (TRU/USD) has surged by more than 200% since yesterday after Binance announced that it had minted 50 million True USD (TUSD/USD) stablecoins. The move comes days after the US SEC started a regulatory crackdown on Binance USD (BUSD/USD), Binance’s native stablecoin.
According to a tweet from Lookonchain, Binance joins the list of TUSD minters which includes the likes of Alameda and Tron’s Justin Sun.
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How is TUSD related to TrueFi?
Many people believe that the True USD (TUSD) is connected with the DeFi platform True Finance, whose native token TrueFi (TRU) surged by more than 200% after Binance announced minting TUSD.
Well, initially TUSD was developed by TrustToken, which was at the time connected to TrueFi. True USD was launched in 2018 and it was listed on the second largest crypto exchange Binance in May of the same year.
However, TrustToke sold the TUSD project to an Asian-based conglomerate called Techteryx. In addition, TrustToken detached itself from TrueFi in June 2022 and rebranded to Archblock.
TUSD is currently the sixth largest stablecoin although it has a market share of less than 1%. Its supply has increased by 29% since the start of the year.
Is Binance seeking alternatives for its BUSD?
Binance issuer, Paxos Trust Company was last week issued with a wells notice by the US SEC. Later on the same day, Paxos was ordered by the New York Department of Financial Services (NYDFS) to stop issuing BUSD although the company later released a statement saying that it was ready to challenge the decision in court.
The developments caused a lot of panic among investors which lead to a surge in Binance withdrawals and BUSD redemptions as the price of Binance USD plunged.
While Binance’s CEO went ahead to state that the BUSD was not a security and they are willing to battle it out with the SEC if need be, the future of Biannce USD looks bleak going by the experiences of other coins like Ripple (XRP/USD) that has had a long battle with the SEC over the securities tag.