CoinClear

TrueUSD (TUSD)

2.8/10

Once-reputable stablecoin that lost trust through Justin Sun association, opaque reserves, and depeg events — proceed with extreme caution.

Updated: February 16, 2026AI Model: claude-4-opusVersion 1

Overview

TrueUSD (TUSD) launched in 2018 by TrustToken as one of the first regulated, fiat-backed stablecoins, positioning itself as a transparent alternative to Tether. Initially regulated and attested by Armanino LLP, TUSD built credibility through real-time reserve attestations and multiple banking partnerships. At its peak, TUSD had a market cap exceeding $3 billion.

The narrative collapsed starting in 2023. TrustToken sold the TUSD brand, and the stablecoin became closely associated with Justin Sun, the controversial Tron founder. Binance aggressively promoted TUSD as a zero-fee trading pair, driving supply to over $3B, but the relationship soured when questions arose about TUSD's actual reserve composition. Armanino LLP, the attestation firm, dropped TUSD as a client, leaving reserve transparency in limbo.

Multiple depeg events occurred in 2023-2024, with TUSD trading as low as $0.97 during stress periods. Reports emerged suggesting portions of TUSD reserves were held in illiquid or non-traditional investments rather than cash and short-term Treasuries. The SEC reportedly investigated the relationship between TUSD, Justin Sun, and various Tron ecosystem entities. By 2025-2026, TUSD's market cap has collapsed to well under $500M, and trust has been severely damaged.

Peg Stability

Depeg History

TUSD has experienced multiple meaningful depegs since 2023. In June 2023, TUSD briefly dropped to $0.97 amid concerns about its reserve backing. Further instability occurred in October 2023 when Binance removed zero-fee TUSD trading pairs, triggering selling pressure. The depeg events were amplified by thin liquidity as major venues delisted or reduced TUSD pairs.

Mechanism Weakness

TUSD's peg mechanism relies on a traditional mint/redeem model: users deposit USD and receive TUSD, or return TUSD for USD. However, the effectiveness of this mechanism depends entirely on the issuer's ability and willingness to process redemptions promptly. Reports of delayed redemptions and questions about reserve accessibility have undermined confidence in the arbitrage mechanism that should keep the peg tight.

Current State

TUSD's peg has been volatile, trading at intermittent discounts to $1.00. Thin liquidity across exchanges means even moderate selling pressure can move the price. The lack of a credible attestation firm and ongoing transparency concerns create persistent downward pressure on confidence.

Collateralization

Reserve Opacity

This is TUSD's most critical failure. After Armanino LLP ceased providing real-time attestations, TUSD's reserve transparency deteriorated significantly. The project claimed reserves were held in a combination of U.S. dollar deposits, U.S. Treasuries, and other investments, but independent verification became effectively impossible. Reports emerged suggesting portions of reserves were held in offshore accounts and potentially illiquid investments.

Justin Sun Association

Justin Sun's involvement introduced significant counterparty concerns. Sun has faced SEC charges for unregistered securities sales and market manipulation. His association with TUSD raised questions about whether reserves were being used for Tron ecosystem activities or other purposes beyond simple dollar custody. The lack of transparent, independent auditing made it impossible to verify these concerns.

Attestation Collapse

The loss of Armanino LLP as attestation provider in early 2023 was a watershed moment. Subsequent attestation arrangements have lacked the credibility and real-time nature of the original system. Without a Big Four or well-known accounting firm providing regular, detailed attestations, users have no reliable way to verify TUSD's backing.

Security

Issuer Trust

TUSD's primary security concern is issuer trust, which has been fundamentally compromised. The chain of custody for the TUSD brand — from TrustToken to entities associated with Justin Sun — created opacity around who actually controls the reserves and smart contracts. Administrative keys and contract upgrade capabilities are controlled by entities whose identity and jurisdiction are not fully transparent.

Smart Contract Risk

TUSD's smart contracts include standard centralized stablecoin functions: pause, freeze, blacklist, and upgrade capabilities. The contracts have been audited, but the upgrade proxy pattern means the current implementation can be changed by administrators. In a trust-compromised environment, this upgrade capability becomes a risk rather than a feature.

Regulatory Risk

The SEC investigation into Justin Sun and associated entities creates regulatory overhang. A potential enforcement action could freeze reserves, restrict operations, or force a wind-down. The jurisdictional ambiguity of TUSD's current operations — spanning multiple offshore entities — complicates regulatory risk assessment.

Decentralization

Control Structure

TUSD is fully centralized with administrative control over all token functions. The current control structure is less transparent than when TrustToken operated the project. Minting, burning, freezing, and contract upgrades are controlled by a small set of administrative keys whose custodians are not publicly disclosed with the same clarity as competitors like Circle or Paxos.

Censorship Capability

TUSD includes standard blacklist and freeze functions. The centralized control means these capabilities can be exercised unilaterally by the administrators. In a trust-compromised environment, the risk that these capabilities might be misused is heightened.

Transparency Deficit

The governance and operational decision-making process for TUSD is opaque. There is no public governance forum, no community input mechanism, and limited disclosure about operational changes. This represents a regression from the original TrustToken era when the project maintained more transparent communications.

Adoption

Market Cap Collapse

TUSD's market cap has fallen from over $3B at its peak (driven by Binance zero-fee incentives) to well under $500M. This collapse reflects the market's loss of confidence. The Binance delisting of zero-fee pairs was particularly damaging, as much of TUSD's volume was artificially driven by fee incentives rather than organic demand.

Exchange Support

Major exchanges have reduced TUSD trading pairs or delisted the token entirely. Binance, once TUSD's primary venue, significantly reduced its support. Remaining liquidity is thin, concentrated on a few exchanges, and insufficient for large-scale institutional use.

DeFi Presence

TUSD's DeFi integration has declined significantly. Many protocols have removed TUSD from lending markets due to reserve concerns, and liquidity pool depths have shrunk. DeFi users have largely migrated to USDC, DAI, or other stablecoins with better transparency.

Risk Factors

  • Reserve opacity: No credible, independent real-time attestation of reserves; reserve composition is unverifiable.
  • Justin Sun association: SEC-charged individual with controversial history controlling or influencing a stablecoin's reserves.
  • Peg instability: Multiple depeg events demonstrate a weakened arbitrage mechanism and market confidence deficit.
  • Regulatory risk: Ongoing SEC investigation and offshore jurisdictional complexity create legal uncertainty.
  • Liquidity collapse: Thin exchange liquidity means positions are difficult to exit at par during stress.
  • Smart contract control: Opaque administrative control over upgradeable contracts in a trust-compromised environment.

Conclusion

TUSD's trajectory serves as a cautionary tale about the importance of institutional trust in fiat-backed stablecoins. The project was once considered a credible, regulated alternative to Tether — real-time attestations, U.S. banking relationships, and transparent operations. The erosion began when ownership changed hands and accelerated when Justin Sun's influence became apparent.

The loss of Armanino LLP attestation, multiple depeg events, SEC scrutiny, and the collapse in market cap collectively paint a picture of a stablecoin that has lost its core value proposition: trustworthy USD backing. The technical infrastructure still functions, but trust — the essential ingredient for any fiat-backed stablecoin — has been severely damaged.

The 2.8 overall score reflects TUSD's profound trust deficit. While the token technically continues to operate, the combination of opaque reserves, compromised governance, thin liquidity, and regulatory risk makes TUSD unsuitable for serious use. Users should consider migrating to stablecoins with verifiable reserves and transparent governance.

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