HUSD, an Ethereum network-based stablecoin issued by Stable Universal Limited, has become the latest cryptocurrency to lose its parity with the U.S. dollar, tumbling by as much as 14.7% on August 18, according to data from CoinMarketCap.
Well-known cryptocurrency exchange Huobi Global, which participated in the launch of the stablecoin in 2019, said that they have noticed liquidity issues concerning HUSD and would work together with its issuer to find a solution and restore stability as soon as possible. Notably, Ruly, Huobi’s community manager, claimed within the community that Huobi had relinquished its stake in Stable Universal in April this year.
The latest developments also came shortly after crypto exchange FTX removed HUSD from its basket of supported USD stablecoins.
HUSD provided some explanation for the liquidity issues on August 19. Recently, it has decided to close several accounts in specific regions to comply with legal requirements, which included some market maker accounts. Due to the time difference in banking hours, this resulted in a short-term liquidity problem but has since been resolved.
However, this cited reason was not trustworthy enough for some crypto insiders. Twitter user “Felix is Felix” replied to HUSD’s tweet: “There is still no liquidity on Ethereum. This is just an announcement to ease users.”
The depegging has resulted in HUSD’s liquidity on the Curve 3pool (3Crv) skewing. HUSD was priced as low as $0.87 at Curve on August 18, and its price bounced back to $0.9961 on August 19.