The proposal, authored by Wormhole Oracle, suggests slashing the debt ceiling for the TUSD Pegkeeper to zero due to concerns around regulation and solvency, while capping the pyUSD Pegkeeper at $5 million. On Tuesday, the SEC announced it had settled charges with Trusttoken and Truecoin over alleged deceptive practices and misleading claims regarding the stablecoin TUSD.

The Pegkeeper’s debt ceiling controls how much crvUSD can be minted into specific pools. This proposal aims to align debt ceilings with the relative importance of each pool. TUSD has faced criticism for its lack of transparency and instability, concerns that have grown since it was accused of misleading investors.

“Ultimately Curve requires a strong diversity of Pegkeepers, but that is another discussion. crvUSD is overexposed to minor stablecoins, especially TUSD which has a dubious track record and has recently been charged by the SEC with defrauding investors,” Wormhole Oracle’s proposal states.

The proposal suggests cutting off exposure to TUSD entirely to safeguard the stability of crvUSD, while exploring other stablecoin options moving forward. “Other Pegkeeper contenders may include USDM,” the proposal highlights. Without admitting or denying the allegations, TUSD’s issuers reached a settlement with the U.S. securities regulator. As of Sept. 25, TUSD continues to trade at its target $1 value, boasting a market cap of $495 million.