The MSUSD stablecoin has lost its dollar peg after a verification provider ended its partnership, causing panic in the DeFi sector.
The MSUSD stablecoin, part of the Main Street project, has lost its peg to the US dollar, with its value dropping drastically below the $1 target on June 20. Reports indicate that the stablecoin's price fell by over 90% following a fallout with its reserve verification provider, Accountable.
Accountable terminated its partnership with Main Street, alleging that the project failed to meet necessary verification standards. In response to the suspension of monitoring, the MSUSD price plummeted, causing significant alarm within the decentralized finance (DeFi) community.
The Main Street team characterized the situation as a technical reporting issue, asserting that the MSUSD assets are fully backed. They have allocated $8 million in USDC to bolster liquidity and are currently in search of a new auditor.
Market Fallout and Altura Fund Closure
The collapse of MSUSD triggered panic across other DeFi platforms, notably leading Altura to shut down its main vault, which was valued at $39 million. This decision followed an unprecedented wave of withdrawal requests, with users pulling over $8.5 million in USDT within 24 hours.
Altura's CEO, Ranveer Arora, clarified that while the protocol had no direct investments in MSUSD, both platforms were audited by the same firm, Accountable. The Altura team has initiated a gradual asset return process to users, though some funds are tied up in long-term strategies.
It's important to note that in May, the total market capitalization of stablecoins reached a record high of $323 billion, highlighting the significance of such incidents in the broader market context.
