TrueUSD stops minting TUSD through Prime Trust, pending further notice. BitGo, a crypto custody firm, is set to acquire Prime Trust, another Nevada-regulated company in the same industry, as per earlier reports. The two entities have officially entered into an agreement expressing their intention to proceed with the investment.
TrueUSD Stops Minting TUSD Through Prime Trust
In recent news, BitGo, a crypto custody company, has announced its plans to acquire Prime Trust, another crypto custody company based in Nevada. Both parties have signed an agreement expressing their intention to proceed with the investment.
However, it should be noted that the deal is still in its preliminary stage and is subject to regulatory approval. The financial terms of the agreement have not been disclosed by the sources. BitGo has confirmed the acquisition intention in a blog post, specifically targeting Prime Core Technologies, the parent company of Prime Trust.
TrueUSD (TUSD) is a stablecoin that functions similarly to other stablecoins like USDT, BUSD, and USDC. It is fully backed by US dollars, aiming to provide transparency and trustworthiness. Unlike other stablecoins, TUSD does not utilize collateral or algorithms.
To ensure the stability of TUSD, the collateral is evenly distributed across various bank accounts held by different trust companies. All parties involved have signed a collateral disclosure agreement, which is regularly updated and subjected to monthly audits. This approach minimizes counterparty risks and offers legal protection to token holders against theft.
Before becoming an independent stablecoin, TrueUSD originated from TrustToken, a blockchain solutions provider established in 2017 and supported by prominent funds.
In a separate development, the SEC issued a notice to the New York Department of Financial Services (NYDFS), directing Paxos Trust, the issuer of BUSD, to cease creating new BUSD coins entirely.
This ban prompted Binance to seek alternative methods to meet the demand for stablecoins. Binance is currently exploring the integration of the TrueUSD contract and plans to support several decentralized stablecoins.
The escalating tension between the SEC and Binance amidst the current market crisis has generated significant interest in the largest exchange and its associated companies.
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