Is the devaluation of TUSD responsible for Binance’s decision to delist multiple TUSD trading pairs?
Binance, a renowned cryptocurrency exchange, has recently announced its decision to cease trading for several stablecoin spot trading pairs associated with TrueUSD (TUSD), a stablecoin linked to Justin Sun. The trading pairs that will be affected include COMP/TUSD, EDU/TUSD, and PENDLE/TUSD. This move is part of Binance’s regular assessment of trading pairs, wherein they consider factors like liquidity and volume to maintain market quality.
The delisting of these trading pairs is scheduled to take place on March 15, 2024, at 03:00 UTC. However, Binance assures users that the base and quote assets of these pairs will still be accessible through other trading options on the platform.
In addition to the delisting, Binance also plans to discontinue its Spot Trading Bots services for these pairs concurrently with the trading halt.
This decision comes after TrueUSD experienced a deviation from its peg to the US dollar earlier this year. On January 15, 2024, an imbalance in TUSD trading on Binance was observed, with sell orders surpassing buy orders by over $142 million. As a result, the value of TUSD fell to as low as $0.984. Within a 24-hour trading window, sell orders for TUSD amounted to over $339.2 million, while buy orders only reached $296.8 million, resulting in a net outflow of $42.3 million.
Further scrutiny into TrueUSD’s operations revealed issues with the real-time attestation of its reserves on January 10. This raised concerns about the stablecoin’s backing, as failures in its API impaired the provision of a US dollar valuation for its collateral assets.
However, the TrueUSD team attributed the depegging event to specific activities on Binance Launchpool, stating that recent mining activities created short-term arbitrage opportunities that are normal aspects of market dynamics and liquidity adjustments. They assured users that redemption mechanisms involving collaborations with global banks were fully operational, ensuring uninterrupted transactions.
However, a research report from Kaiko indicated that TUSD was no longer being utilized for mining activities on Binance Launchpool. This marked a significant shift in the stablecoin’s engagement with the platform and was considered a core reason for its devaluation.
Despite these events, Binance continues to strengthen its presence in the cryptocurrency industry. Recently, the exchange organized a law enforcement workshop in Taiwan to bolster trust in web3 technologies.
