TrustToken is using blockchain to improve the trustworthiness of investments and transactions, and the company is issuing more tokens that will enable investors to take advantage of the benefits of tokenization. For the first time, the company today will accept public investment on the CoinList platform from accredited investors.
TrustToken allows individuals and institutions to more easily trade cryptocurrencies within and across exchanges, which could bring institutional investors into investments in cryptocurrency. This enabled the company to raise $20 million last month in private strategic funding from a16z crypto, BlockTower Capital, Danhua Capital, GGV Capital, Jump Capital, and other leading investment firms.
TrustToken has an opportunity because other cryptocurrencies have been too volatile. As the value of a Bitcoin and Ether went up — and then came down — it became a lot harder to use the cryptocurrencies in ordinary transactions. By backing the currencies with hard assets such as the U.S. dollar, TrustToken’s stablecoin brings dependability to the price of cryptocurrency, and that makes it more tradable.
Registrations are now open for the next round of TrustToken’s token sale. TrustToken is making its staking tokens available to accredited investors on CoinList. If institutional investors get off the sidelines and invest in cryptocurrency, that could bring much more money into the ecosystem, TrustToken believes.
CoinList is a leading platform for token-based financial services. CoinList is highly selective; each offering goes through a rigorous diligence process before receiving approval to be made available to CoinList investors.
TrustToken is a platform for creating asset-backed tokens that you can easily buy and sell around the world. These tokens are trusted because you can exchange them for real assets.
For example, gold tokens are backed by gold, and dollar tokens are backed by dollars. TrustToken’s first asset token is TrueUSD, a stablecoin that you can redeem 1-for-1 for U.S. dollars. With redeemability facilitating price stability, the token has surged in popularity with individual and institutional traders, reaching over $85 million in market value in just four months of trading. That’s up from $12 million in its first two months.
Accredited investors may register at CoinList.co through July 17 to participate in the latest TrustToken offering, which opens today. The offering has a hard cap of $61 million allocated over three tranches priced at 12 cents, 14 cents, and 16 cents per TrustToken (TRU). Since this 435 million token offering is the first TrustToken accredited public sale, the structure consists of increasing-price tranches to allow for proper distribution of TRU tokens depending on purchaser demand. Any unsold TRU tokens will be sold in future rounds.
“Having CoinList offer our round to their investors means we can connect to sophisticated global traders and increase participation in the TrustToken platform,” said TrustToken CEO Danny An, in a statement. “The funds raised in the CoinList round will enable us to build upon the success of the TrueUSD stablecoin and expand with the creation of tokens backed by Euro, Yen, and real-world assets.”
To make it even easier to invest, TrueUSD has also been added as a quote currency on the HitBTC and HBUS exchanges. That makes it the only fully collateralized, dollar-backed stablecoin on the exchanges. HBUS has $50 billion in cryptocurrency assets traded on its exchange.
Getting on these exchanges as quote currencies is important because the exchanges can trade hundreds of coins valued at hundreds of millions in a day, but they need stable currencies to handle those trades, which may often involve conversion into several currencies.
In the TrueUSD system, U.S dollars are held in the escrow accounts of multiple trust companies rather than in a bank account controlled by a single company. The contents of the TrueUSD escrow account are verified by an independent third-party accountant (Cohen & Company) that publishes monthly attestation reports of the amount of dollars held as collateral.
If someone wants to purchase TrueUSD through the web application, they will need to pass AML/KYC requirements. When that is complete, they send dollars to one of TrueUSD’s trust company partners. After the funds are verified by the trust company, the TrueUSD smart contract issues tokens on a 1-to-1 ratio before sending the newly minted TrueUSD tokens to the purchaser.
Once in a wallet, TrueUSD tokens can be transferred or used as payment, combining the benefits of fiat (stability and trust) with the advantages of cryptocurrency (lower fees and faster transfer times). An individual can also redeem real U.S. dollars by sending the TrueUSD tokens back to the smart contract address, which will notify the trust company and initiate a bank transfer to the token holder’s account.
TrustToken has 20 employees and is hiring more. The company is working on several new products, including the gold-backed token TrueGold.