What's Driving Token Prices? June 28, 2023

AUDIO (-6.9%) - Decentralized music streaming platform Audius is under pressure this week following troubles at crypto custodian, Prime Trust. Approximately, 88% of the digital assets owned by Prime Trust are said to be $AUDIO tokens. Prime Trust claims it lost access to the keys of certain wallets and therefore was unable to access its crypto assets. It is unknown what will happen with the remaining $AUDIO tokens with many trying to short the token and others claiming it could be accessed by creditors.
TUSD (-0.7%) - Traders in the market have been shorting stablecoin TrueUSD in anticipation of issues with its reserves which are custodied at Prime Trust. TUSD, which has a $3b market cap, is a stablecoin priding itself on safety and security and claiming it is “the first USD stablecoin operated by a regulated operator”. Although the story is still unfolding, Prime Trust is being accused of using customer assets to buy back crypto that it is unable to access. Currently, the custodian owes over $85m in fiat currency but only has $2.9m, and owes $69.5m in digital assets to its clients but only has $68.65m.
ARB (-0.2%) - Yesterday, native cross-chain bridging for USDC went live on layer-2 protocol Arbitrum. The introduction of Circle’s Cross-Chain Interoperability Protocol (CCIP) allows for direct bridging to and from the Ethereum and Avalanche networks. This is a huge change from current bridges which use mint/redeem features when bridging assets. CCIP greatly reduces the security and exploitation risks of traditional bridges and should hopefully bring greater liquidity and composability between chains. However, this type of protocol only works since Circle is a centralized entity controlling the flows of USDC among different chains.
FTT (+54%) - FTX’s exchange token soared last week based on a new lawsuit launched by the now-bankrupt firm. The lawsuit was brought by the FTX creditor’s committee against K5 Global, an investment group that accepted $700m from FTX’s ex-CEO, Sam Bankman-Fried. When he made the investment, Bankman-Fried claimed the money was his, however, following last year’s collapse of FTX, it became clear that these assets were owned by the exchange and therefore belong to creditors. As part of the $700m investment, the founders of K5 Global supposedly each received $125m for their services and included introductions to celebrities, sports stars, and politicians. The lawsuit will likely take a long time to play out, but the market is hopeful that it will be successful with FTT trading up 54% this week on the news

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