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TUSD is issued by Techteryx Ltd, a China-based conglomerate shrouded in mystery. Details about the company’s corporate information, ownership and the identity of the management team are not disclosed. However, it is commonly believed that it is controlled by Justin Sun.
TUSD is backed by US cash deposits, cash equivalents and short-term, highly liquid investments. However, Techteryx, the issuer of TUSD, is not transparent about the exact type and amount of each asset held in reserve.
TUSD claims to provide real-time reserve attestations but these are fully-automated attestations based on data feeds from third parties. No manual verification or review is performed on source data or on the attestation reports..
In our opinion, the general lack of transparency in relation to reserves, management structure and operations, risk makes us apprehensive about TUSD. We strongly advise against using TUSD.
TUSD's rating can be upgraded from D to C by:
disclosing the the quantum and type of assets held in reserves
resuming redemptions and continuing to meet redemptions consistently for a 3 month period
clear disclosure of the management structure and details of ownership of Techteryx AND
performing a complete financial audit by an independent auditor OR
incorporating transparent and reasonable timelines for redemption in the Terms of Service, similar to conditions imposed by the NYDFS on stablecoin issuers under its authority.
The Stability factor is evaluated on the following:
1. Reserves Management - Quality, quantity, storage and segregation of reserve assets
2. Market Feedback - Indicators of market's confidence in a stablecoin derived from price and trade data
3. Mechanism - Stabilization methods that protect the stablecoin
The Management factor is evaluated on the following:
1. Restrictions - What deterrents exist to prevent key personnel of stablecoin projects from unethical and illegal behavior?
2. Negative Track Record - Have key personnel been involved in scams, frauds or other illegal activities?
This factor aims to assess risks arising from technical implementations – i.e, smart contract code and oracles. It is currently not assessed, but we plan for it to be evaluated in the future.
The Decentralization factor is evaluated on the following:
1. Platform Censorship Risk
2. Custodian Risk
3. Type of Collateral
4. Diversified voting Power
5. User Censorship Risk
The Governance factor for fiat-backed stablecoins is evaluated on the following:
1. Holder Protection - What rules, statutes or code exist to protect interests of stablecoin holders?
2. Reserves Verification - What checks are done to ensure existence of reserves?
3. Redemptions - Do issuers have transparent and reasonable redemption terms?
This factor seeks to incorporate external feedback mechanisms such as market and social sentiment into our internal ratings. It is currently not assessed, but we plan for it to be evaluated in the future.