**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, TUSD’s issuer, with securities law violations.

- **Proposal Details**: On Sept. 25, Wormhole, a cross-chain messaging protocol, suggested reducing crvUSD’s 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 Paypal’s 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 TUSD’s 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.