Wednesday, April 24, 2019

Audit of TrueUSD Escrow Accounts Shows Full US Dollar Backing

After an assertion of TrustToken’s escrow accounts, it was affirmed that TrueUSD, a stablecoin backed by the dollar has collateral that is equivalent to the number of coins in circulation. The assertion was carried out by Cohen & Co, a U.S. certified public accounting (CPA) firm, according to TrustToken’s report on April 8.

Dollar Collateral Fully Backs TrueUSD in Circulation

Per the report, an audit of TrustToken’s escrow accounts reveals that $199,063,885 fully backs the 198,982,291 TrueUSD coins that are in circulation. The assertion was carried out by Cohen & Company on March 31. According to TrustToken, the company is neither “a parent company of, nor has any financial interest in, TrustToken, Inc.”

TrustToken also said:

We set out to build a fully collateralized USD-backed stablecoin that the community would use and trust.

Examination Was Carried Out in Accordance with Standards

Cohen & Company, on the other hand, stated that the examination was carried out in accordance with the standards set by the American Institute of Certified Public Accountants. It also affirmed that TrueUSD which is based on the Ethereum blockchain has a circulation which does not exceed the dollars held in reserve. The confirmation was made at 5:00 pm Eastern Time on March 31, 2019.

Furthermore, the funds held by TrustToken are in federally insured US depository institutions. Likewise, neither is TrueToken nor the organization managing the funds entitled to it in accordance with the escrow agreement.

The firm further stated that:

There are no liens, claims or security interests in any funds within the escrow accounts…There are no resignation proceedings in process by the escrow agents and no known conditions which would allow the immediate termination of the escrow agreements.

Stablecoins Have Gained Popularity Due to Price Stability

Stablecoins have gained popularity of recent, and despite the fluctuating rates of Bitcoin and other virtual assets, their price did not decline significantly. Their steady price can be linked to being backed by a fiat, commodity or another cryptocurrency. The same is the case with TrueUSD, the 38th largest cryptocurrency with a market capitalization of $202 million.

While this report will give confidence to TrueUSD holders that the coin is fully backed. there are still concerns when it comes to stablecoins like Tether, USDT. The latter is the first stablecoin that was launched and it currently occupies the 10th position on CoinMarketCap platform due to its $2.2 billion market cap.

There have been allegations that the virtual asset is not fully backed by the dollars which its developers claim it does. It may not be these people’s fault given there was an update to the company’s terms which makes their claim questionable.

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