**Curve Finance Considers Dropping TrueUSD Amid Regulatory Concerns**
Curve Finance, a decentralized exchange (DEX), is mulling over the removal of TrueUSD (TUSD) as collateral for its stablecoin, crvUSD. This comes after U.S. regulators charged TrueCoin, TUSDâs issuer, with securities law violations.
- **Proposal Details**: On Sept. 25, Wormhole, a cross-chain messaging protocol, suggested reducing crvUSDâs TUSD backing to zero due to regulatory risks and solvency concerns.
- **Current Limits**: Users can mint up to $10 million worth of crvUSD with TUSD. The proposal also recommends reducing the mintable amount with Paypalâs stablecoin, PYUSD, from $15 million to $5 million.
- **Regulatory Actions**: On Sept. 24, the SEC settled charges against TrueCoin and TrustToken for fraudulent and unregistered sales of investment contracts involving TUSD. The SEC alleges that 99% of TUSDâs reserves were invested in a speculative offshore fund.
- **Collateral Overview**: crvUSD is backed by various cryptocurrencies, including Ethereum (ETH) and Wrapped Bitcoin (WBTC). WBTC holds the largest share, with over $68 million in total value locked (TVL), followed by Wrapped Staked Ether (wstETH) at around $60 million.
The proposal highlights the need for a diverse range of collateral to mitigate risks associated with minor stablecoins like TUSD.