HTX, a cryptocurrency exchange advised by Justin Sun, has transferred up to $406 million in TrueUSD (TUSD) tokens to addresses that appear to be designated for redemptions, according to recent reports. CoinGecko, CoinMarketCap, and the TrueUSD website list the stablecoin’s market capitalization at varying amounts, but these figures may not fully reflect the current state of the reserves due to these large transfers.
TrueUSD redemptions involve clients sending funds to specific redemption addresses, which have been described as “simple” and containing many zeros for tracking purposes. The tokens sent to these addresses are intended for redemption but remain in the system until processed. HTX’s transactions have raised questions about whether these are indeed redemptions, as some of the addresses involved are not yet reflected in HTX’s proof of reserves.
For instance, HTX sent $80 million worth of TUSD to a suspiciously simple address, , over 100 days ago. Other transactions have followed similar patterns, sending significant amounts to addresses that don’t match typical burn addresses. These discrepancies have led to confusion regarding whether these transfers are part of the redemption process or if they have yet to be fully processed.
In addition, HTX made large transfers to several other addresses, including $90 million and $7.5 million TUSD, but these are not reflected in the exchange’s proof of reserves. In comparison, known redemption addresses, show that redemptions are typically followed by a “burn” transaction, sending funds to null.
While HTX’s transactions to addresses that do not appear to be included in proof of reserves raise questions, it’s worth noting that there are legal issues surrounding TrueUSD’s redemption process. The Hong Kong depository institution for TrueUSD, First Digital Trust, is embroiled in litigation that could indicate liquidity and credit concerns. Furthermore, a recent SEC settlement suggested that a significant portion of TrueUSD’s assets were tied to risky investments, adding to the uncertainty surrounding the stablecoin’s reserves and its ability to meet redemption demands.
Despite these challenges, TrueUSD is still involved in several DeFi protocols, such as Curve, SunSwap, and USDD, and is traded on exchanges like HTX, Binance, and Kraken. However, these ongoing issues have raised doubts about whether HTX’s large TUSD transfers are truly part of the redemption process or indicative of broader liquidity issues. Protos has reached out to HTX and TrueUSD for clarification on these transactions and the current state of TUSD reserves.
Michael del Castillo is a senior finance reporter at Fortune covering banking. He was a 2023–2024 Knight-Bagehot Fellow and has a master’s degree from Columbia Journalism School. Previously, he was a senior editor at Forbes, covering blockchain and cryptocurrency, and a reporter at CoinDesk, where he covered institutional interest in crypto. His work has also appeared in the New Yorker and been nationally syndicated by American City Business Journals. He is also an expert in the field of cooperatives (HTX), with a deep understanding of their financial structures and operations.