Archblock, the company responsible for TrueUSD’s $2 billion in reserve assets, happened to have carried out a transfer to the tune of $1 billion. This was made to the Bahamas-based Capital Union Bank. The bank, at the present moment in time, is holding on to a total amount of $1.4 billion regarding the stablecoin’s reserves. Incidentally, TrueUSD happens to be the fifth-largest stablecoin globally. The initial reason cited for this is the present and highly volatile U.S. banking scenario.
According to the CFO and COO of Archblocks, Alex de Lorraine, they found it extremely necessary to secure their funds, which happen to be in possession of the U.S., and they require an offshore bank. This incident seemingly signifies the fact that the U.S. is not so much in favor of crypto companies. There also happens to be a lot of regulation-related actions being taken, along with the overall dismal scenario as far as the banks themselves are concerned. At the present moment in time, the biggest economy in the world is not exactly conducive for crypto companies to carry on with their activities.
Signature Bank was the most recent institution forced to close by New York’s banking regulators. It so happened that the bank was TrueUSD’s former banking partner. This may be one of the additional explanations for the urgent money transfer to the Bahamas. Yet, the bank does not have any TrueUSD collateral assets. De Lorraine said the entire situation could have been avoided if the banking industry had consented to collaborate with crypto firms. He also criticized a lack of forethought and the existing regulatory institutions.
A little while back, it happened to be Silvergate Bank that went into voluntary liquidation. This is after it had experienced a rough time with its reserves. Following that was the closure of the Silicon Valley Bank by the California Department of Financial Protection and Innovation. This happened because the bank claimed it needed $2.25 billion to do justice to the deposits.
However, there was a joint statement issued by the U.S. Treasury Department, as well as the Federal Reserve and FDIC, that, in the case scenarios of Signature Bank and Silicon Valley Bank, the concerned and connected customers will have the opportunity of gaining total access to their accounts, but not in the case of equity and bondholders. For them, there will be nothing at all.