Breaking: Justin Sun To Dump On USDD Investors, YouTuber Alleges

As USDD continues to perform below the $1 peg, there is talk of whether or not any risk is involved for the investors. After losing the dollar peg on June 13, Justin Sun USDD has since then fallen to a low of $0.93 before regaining the $0.98 level.

As of writing, USDD is trading at $0.978, up 0.35% in the last 24 hours, according to CoinMarketCap. In terms of market cap, the stablecoin had a market cap of $723 million before the depegging began on June 13. After losing the market size for a few days, the current market cap stands at $704 million having fallen below $700 earlier.

Are Trader Funds Safe?

Although it is claimed that the USDD is a decentralized algorithmic stablecoin, many argue that it is actually centralized. Unlike other stablecoins like UST, minting the USDD is an exclusive affair. Only a few whitelisted institutions are allowed to mint new USDD, which is by burning Tron’s TRX.

Meanwhile, YouTube Coffeezilla hinted that the collateral assets are probably stored in a wallet belonging to Justin Sun.

“It is unclear whether these assets will actually be deployed, and the BTC wallet they have is over 2 years old, suggesting this isn’t a new DAO wallet but possibly just a Justin Sun BTC wallet.”

Who Is Minting USDD?

He also claims that 94% of the USDD appears to have been minted by Justin Sun himself. The Tron founder’s suspected address minted 683,320,461 USDD, which is 94% of all the USDD ever minted,” he observed.

The Youtuber alleged, “USDD looks like a honeypot for retail traders to get dumped on by Justin Sun himself.”

As things stand, the Tron DAO Reserve backs the total outstanding supply with a portfolio of $2.31 billion in various cryptocurrencies. The reserve claims that USDD is secured by the over-collateralization of multiple mainstream digital assets like TRX, BTC, and USDT. The total value of collateralized assets is significantly higher than that of USDD in circulation with the collateral ratio set at 130%.