The oppressive regulations and abysmal policies surrounding cash have inexplicably driven people towards cryptocurrencies, both in the developing and developed world. But what kind of twisted logic can justify a cryptocurrency – not even a centralized exchange – that demands KYC and AML procedures before you can even think about purchasing it?
Welcome to the mind-boggling realm of TUSD.
Don’t be fooled by its claims of being a stablecoin; TUSD’s centralized structure reeks of a central bank digital currency, raising grave concerns about the extent of TrustToken’s control and the disastrous implications it holds for users.
It is absolutely crucial to embark on an unfiltered exploration of TUSD, to expose its true nature and shed light on the centralization nightmare, which in turn leads to a deeper understanding of the dire consequences it entails.
Is TrueUSD truly as stable and trustworthy as it shamelessly asserts?
In this scathing analysis, we plunge into the intricate details of the TUSD token, casting doubt upon its design, governance, collateralization, and overall credibility. Prepare yourself for the unveiling of the profound cracks in the foundation of TUSD’s supposed stability, as we unravel the deceptive illusions that continue to ensnare the unsuspecting masses.
What is TUSD?
TUSD, or TrueUSD, is yet another digital asset concocted by TrustToken and shamelessly marketed as a stablecoin supposedly pegged to the U.S. dollar. Supposedly, its primary purpose is to provide stability in the tumultuous realm of cryptocurrencies and serve as a reliable medium of exchange. But has it truly fulfilled its intended purpose or managed to live up to the lofty expectations thrust upon it?
When it comes to market performance, TUSD has somehow managed to maintain its peg to the U.S. dollar, as it was supposedly designed to do. This so-called stability is supposedly achieved through regular audits and collateralization, where TrustToken claims to hold an equivalent amount of U.S. dollars in reserves to back each TUSD token in circulation.
However, it’s important to recognize that stability alone is not a guarantee of success or value in the world of digital assets. Let’s not forget the now-defunct FTX, once hailed as a darling of the audit industry. And what about LUNA? Rings any bells?
Furthermore, we must scrutinize TrustToken’s ability to freeze user accounts or seize tokens at will, all under the guise of alleged breaches of their terms and conditions. This concentration of power in the hands of a centralized authority raises crucial questions: How much trust can users truly place in an entity that wields such control? What risks does this authoritarian grip pose to the stability and dependability of TUSD?
1. Skewed Whale Ownership
Let’s take a closer look at the ownership of this stablecoin. While there may be around 50,000 token holders, the percentage of whales among them is an insignificant 0.4%. Sounds harmless, right? Well, think again. These few individuals hold a staggering 75% of the TUSD in circulation, painting a bleak and alarming picture of the situation.
It’s high time we cast a critical eye on TUSD’s claims of stability and dig deeper into the twisted reality it represents. Prepare yourself for a revealing journey that will expose the flaws, deception, and inherent dangers lurking within the very foundation of TUSD.
TUSD whale holding – Source: Coinmarketcap
Compared to other stablecoins, this disconnection from reality seems glaring
USDT Whale Holding – Source: Coinmarketcap
USDC Whale Holding – Source: Coinmarketcap
DAI Whale Holdings – Source: Coinmarketcap
2. Transparency: A Cloak or a Veil?
Transparency, supposedly a defining characteristic of TUSD, is nothing more than a shallow facade. How far does this supposed transparency actually go? While they may boast about rhetorical audits and published results, the heavy reliance on centralized audits raises serious doubts.
Let’s not forget the incident from just a year ago when a major crypto depegging shook the very foundations of our understanding of crypto auditing. Despite claims of undergoing audits, the truth remains that most of these audit companies (with only a few exceptions) lack the competence to conduct thorough analyses of these projects.
3. Decentralization? Not a bit
Here’s a harsh reality check for you: If you want to purchase or redeem TUSD on the TrustToken platform, be prepared to go through the burdensome Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures, which require submitting all sorts of documentation. While some naive individuals may view these requirements as bolstering trust in the platform, they have sparked fierce debate within the cryptocurrency community.
Certain members rightly see these stipulations as a direct contradiction to the very ideals of decentralization and anonymity that cryptocurrencies were built upon. How can I possibly differentiate myself from someone completely entrenched in the fiat system if I’m forced to go through KYC just to acquire TUSD?
Furthermore, this mandatory AML and KYC process introduces invasive surveillance and potential violations of privacy, completely diverging from the fundamental principles of cryptocurrencies. And let’s not overlook the fact that TrustToken’s centralized platform raises serious concerns about the security and confidentiality of the sensitive personal information that users are required to provide during the verification process. Just take a look at the skyrocketing number of new accounts and you’ll understand how the market perceives this so-called stablecoin.
Prepare to have your illusions shattered as we expose the glaring contradictions, hypocritical practices, and outright dangers hidden beneath the surface of TUSD.
TUSD Monthly Accounts – Source: Dune Analytics
TUSD Daily Accounts – Source: Dune Analytics
Total Balance TUSD – Source: Dune Analytics
4. Regulatory Roulette: Will TUSD Survive?
VI. Regulatory Roulette: Will TUSD Survive?
Navigating the treacherous waters of regulatory compliance is a formidable challenge for stablecoins, and TUSD finds itself in the same predicament. As the regulatory landscape continues to evolve, can TUSD withstand the ever-changing rules of this dangerous game? Will it even survive half of what USDT has endured? If the government decides to launch a full-fledged assault, complete with whistleblowing compensations, will we witness the dirty secrets being aired in public? The current structure of TUSD certainly suggests so.