TUSD Issuer Moves $1 Billion Reserves to Bahamas Bank – Is There a "Hidden Hand" of Justin Sun?

The issuer of the fifth-largest stablecoin, TUSD, has moved $1 billion in reserves to Capital Union Bank in the Bahamas amid a wave of digital asset firms seeking new homes for their cash reserves following the collapse of several major financial institutions in the U.S.

Archblock Seeks New Safe Haven for Reserves

According to Bloomberg, Archblock, which manages TrueUSD (TUSD), recently transferred over $1.4 billion to Capital Union Bank, headquartered in Nassau, Bahamas. As of March 10, the amount held there was just $438 million.

In addition to this, Archblock holds $72.5 million at Prime Trust and $525 million at First Digital Bank, according to the latest data as of March 16.

List of Banks Holding USD Reserves for TUSD
Screenshot from TUSD’s website on March 16, 2023

Alex de Lorraine, CFO of Archblock, shared with Bloomberg:

“The decision to move funds to Capital Union Bank recently is a direct consequence of the banking scandals happening in the U.S. Even operational accounts for taxes, payroll, and expenses are challenging to maintain if you’re not a multi-billion dollar business.”

Signature Bank, previously Archblock's largest banking partner, was abruptly closed by U.S. authorities. Archblock had deposited over $852 million with Signature, according to ChainArgos snapshots. However, reports indicate that Archblock managed to withdraw its funds from Signature.

Capital Union Bank is known for providing deposit and transaction services to crypto businesses and is a banking partner for the largest stablecoin issuer, Tether.

TrueUSD (TUSD) has doubled its circulating supply in the past month after its rival BUSD, previously branded by Binance, faced legal troubles with U.S. regulators. Since then, Binance has been issuing significant amounts of TUSD and listing it in various trading pairs. Recently, Binance announced it would end free BTC trading fees, except for pairs involving TUSD.

See More: What Makes TUSD Special to Be “Chosen” by Binance?

TUSD was originally owned by TrustToken before being acquired by Techteryx, an Asian conglomerate. TrustToken later split from TrueFi, rebranding as Archblock last year to continue operating and managing TrueUSD on behalf of Techteryx.

Stablecoins like TrueUSD maintain a 1:1 value with a stable asset such as the U.S. dollar and are backed by a significant amount of cash and cash-equivalent assets. They are commonly used for cross-exchange transactions and as a safe haven from price volatility, making them a crucial component in the crypto space.

TUSD’s market cap is currently near $2 billion, placing it as the fifth-largest stablecoin. Its trading volume is around $37.7 million over the past 24 hours.

Collapse of Three Banks – Silvergate, Silicon Valley Bank (SVB), and Signature Bank

The failure of these three banks has left many digital asset firms in disarray, urgently seeking new solutions to safeguard their reserves.

The most glaring example is Circle, the issuer of USDC, which faced a severe depeg issue after revealing $3.3 billion exposure to SVB.

Is Justin Sun “Controlling” TUSD?

As Coin68 previously reported, Justin Sun is the second-largest issuer of TUSD in history. According to information posted by the TRON founder in October 2022, TUSD is also recognized by Dominica as legal tender.

Additionally, data from TrueUSD shows that TUSD on the TRON network constitutes a significant portion compared to other chains like Ethereum, BNB Chain, and Avalanche. Of the approximately $2 billion circulating supply, $1.3 billion (65%) is issued on TRON.

Connecting these dots, it is possible that Justin Sun plays a major role in controlling TUSD.

Another trace from Loononchain reveals that a wallet, potentially belonging to Justin Sun, bought USDC with USDT during the stablecoin's depeg to avoid losses, earning over $3.3 million. Interestingly, this individual later received 100 million USDC from TRON’s founder and transferred all 150 million USDC to Coinbase today, possibly to exchange for cash.