TUSD: The Early Days & SBF
We’ve written a lot about the TrueUSD. Now we are going to look at the early days. In Jan 2019 they changed contracts. The legacy TUSD contract is here. There are still about $200 million of these sitting around. Roughly if you haven’t touched your balance since 2018 the old tokens are still fine.
Here we are going to present 3 facts about 2018 TUSD. These are just facts intended to help frame what is going on.
- The largest redeemer of TUSD at this time was Alameda Research. This likely already involved Silvergate and Signature. We have a few suggestions for SBF’s prosecutors.
- In practice TUSD was used as an on-ramp for Binance and little else. This is not shocking as Binance grew to be the biggest exchange so you’d expect it to be associated with stuff that worked. Nothing is implied here; it’s just a new fact.
- Quite a few on-ramp and off-ramp users of TUSD pushed a few million through in one direction or the other in 2018 and then stopped. This is weird. Though again, as we have emphasized before, we are not suggesting anyone broke the law — it’s just maybe things were used in an unconventional way.
The Early Days
The old contract had about $292 million minting and $86 million burning:
These tables, plus a tiny bit of further digging, are sufficient to unearth some new facts.
Alameda Research
The top burner is Alameda Research. Bear in mind this is 2018. This is the era of bank fraud SBF admitted on video.
We already know Signature and Silvergate were banking this (from our earlier posts and here). They are now under the control of the government. TrustToken, who runs TUSD, is a US money-transmitter. These folks should have all the details needed independent of whether Alameda’s records are useful.
This is a straightforward case for the prosecutor. Getting SBF on this kind of wire/bank fraud may not be maximally satisfying for folks that lost money on FTX — but this is a straightforward case and $14 million is sufficient to secure any sentence you’d like.
Binance
The biggest minting address only ever sends TUSD to Binance. There are 56 outflows of the old TUSD token from 0xebcd46beb5ffcd5e102c352eb6fc3073f6f53a62 and all of them are to 0x3f5CE5FBFe3E9af3971dD833D26bA9b5C936f0bE. That’s Binance. It sends a total of $198 million there. $80 million legacy TUSD are still sitting in that wallet:
Now this 0xebdc wallet only minted $125 million. Where did the rest come from? Bittrex. The second largest minter is Bittrex. And Bittrex sent $70 of the $74 million it minted to Binance. Bittrex was involved in a lot of stuff at this time. And we know it banked at Signature too.
Recall this is 2018. $200 million was a lot of stablecoin! This route was a meaningful fraction of inflows.
And again: it’s not surprising they ended up at Binance. Binance won the competition among exchanges. People put money there and there was no binance.us at the time. This does not indicate the exchange did anything wrong. But it’s still risk for depositors.
Transient Users
Some of the other minters and burners have interesting patterns. Check out this pair of histories:
Or this:
These accounts on-ramp or off-ramp 6-figure-ish amounts during 2018 and just disappear. There are quite a few of these with total business in the few-million range.
And a few of these accounts look like:
62 days to move money from one place to another. Ok. Almost every substantial minter and burner has an amusing history.
There are good records for all of this within the possession of known US companies. Several of those companies are now property of the FDIC.
Risk Management
These funds are not meaningfully segregated at the stablecoin-backing-trust level or the on-chain-wallet level. If any of these links ends up in court that is a risk for quite a few folks.
