Decentralized finance protocol Neutrl has suspended minting and redemptions for NUSD, its synthetic dollar pegged to the U.S. dollar through yield-bearing crypto assets and market-neutral strategies. The halt affects approximately $53.6 million in circulating supply after unspecified circumstances impacted the protocol's reserves.
Neutrl announced the suspension Thursday based on legal advice and has not disclosed the specific asset or counterparty involved, nor confirmed whether reserves suffered a realized loss. A timeline for resuming operations has not been provided.
Structured-yield protocol Strata subsequently paused minting, redemptions and related functions for contracts within its Neutrl market, which supports several NUSD-linked products. Strata's other markets continue operating without interruption.
As of Friday, NUSD traded at approximately $0.9984, down from a $53.6 million market capitalization—representing an 18.4 percent decline over 30 days, according to RWA.xyz. Monthly transfer volume fell 72.4 percent to $71.4 million, with 615 holders and 347 active addresses in the preceding month.
A February assessment by risk-advisory team BA Labs had classified a proposed NUSD integration as higher risk, citing concerns about counterparty, operational and liquidity exposure. At that time, NUSD supply stood at $226 million with $233.7 million in reserves—a 103.6 percent collateralization ratio. BA Labs reported that more than 87 percent of reserves were held through Fireblocks, with smaller amounts distributed across centralized exchanges.
NUSD redemptions were limited to KYC/KYB-verified counterparties. Requests exceeding the protocol's liquid buffer could enter a queue targeted for 48-hour completion, though no explicit guarantee was provided.
In May, verification platform Accountable stated its Neutrl dashboard provided continuous cryptographic proof that NUSD reserves matched protocol liabilities. Neutrl has committed to providing timing and next steps once its reserve assessment concludes.
