Decentralized finance protocol Neutrl has suspended minting and redemptions for its NUSD synthetic dollar, citing unspecified circumstances affecting its reserves. The protocol did not identify the specific asset or counterparty involved, nor confirm whether reserves suffered a realized loss or provide a timeline for resuming operations.
Neutrl announced the suspension Thursday based on legal advice and also paused other protocol functions. Strata, a structured-yield protocol supporting NUSD-linked products, subsequently paused minting and redemptions for contracts within its Neutrl market, though other Strata markets remained operational.
With $53.6 million in NUSD circulating, the suspension prevents approved counterparties from exchanging the token for backing assets. On-chain data from RWA.xyz showed NUSD trading at approximately $0.9984 on Friday, down 18.4 percent over the preceding 30 days. Monthly transfer volume fell 72.4 percent to $71.4 million.
NUSD is structured to track the U.S. dollar through yield-bearing crypto assets and market-neutral strategies rather than bank deposits. The token had 615 holders and 347 active addresses over the past 30 days, according to RWA.xyz.
A February assessment by risk-advisory team BA Labs had flagged a proposed Neutrl integration as higher risk, citing concerns regarding counterparty, operational and liquidity exposure. BA Labs noted that direct NUSD redemptions were limited to KYC or KYB-approved counterparties, with requests exceeding the liquid buffer entering a queue targeted for completion within 48 hours but without guarantee.
At the time of BA Labs' assessment, NUSD supply stood at $226 million with reserves totaling $233.7 million, implying a 103.6 percent collateralization ratio. More than 87 percent of reserves were held through Fireblocks, with smaller amounts on centralized exchanges.
In contrast, verification platform Accountable stated on May 25 that its Neutrl dashboard provided continuous cryptographic proof that NUSD reserves matched the protocol's liabilities.
