Wormhole proposes that Curve remove TUSD as collateral for crvUSD due to concerns raised by SEC allegations

ChainCatcher news, according to Cointelegraph, Wormhole has initiated a new proposal in the Curve governance forum, suggesting to reduce the collateral cap for crvUSD's TUSD to zero "to completely eliminate exposure to TUSD" due to regulatory risks and solvency issues.

The proposal also suggests reducing the mintable amount of PayPal's stablecoin PYUSD from $15 million to $5 million, "thus making the reliance on each PegKeeper suitable for the importance of their respective pools." Currently, the main collateral for minting crvUSD also includes ETH and WBTC.

Previously, on September 24, the U.S. SEC reached a settlement regarding allegations of fraud against TrueCoin and TrustToken involving unregistered sales of investment contracts related to TrueUSD. The allegations claimed that 99% of TUSD's reserve funds were invested in high-risk offshore funds, raising concerns about its safety and solvency.