Pump and dump scams and Ponzi schemes are becoming more commonplace as the cryptocurrency industry continues to expand and digital assets gain greater popularity.
Notably, a new stablecoin called USDD (USDD), a cryptocurrency issued by the TRON DAO Reserve, has been called into question by Stephen Findseisen, a.k.a. Coffeezilla. Indeed, the YouTuber explained in his video published on June 24 about a potential Ponzi scheme with the newly issued stablecoin.
As the USDD’s performance remains consistently lower than the $1 peg, there has been discussion over the investors’ potential exposure to risk. Following the loss of the dollar peg on June 13, USDD saw a significant decline, reaching a low of $0.93 before recovering to its previous level of $0.98.
After the collapse of the Terra (LUNA) ecosystem, Findseisen highlighted a few key similarities and distinctions between the two coins and highlighted that the Ponzi-like currency claim as DeFi is not entirely accurate.
Who created USDD?
The creator behind the new stablecoin turns out to be a billionaire named Justin Sun, quite a controversial figure in his own right, who had fled multiple countries under fear of prosecution. At the same time, a former employee alleges that they were engaged in “insider trading all the time.”
Sun admits, “we came up with the idea for USDD after witnessing Terra’s dramatic ascent.” However, he launched USDD just a few days before Luna’s collapse; although not a good…
