Decentralized finance protocol Neutrl suspended minting and redemptions for its NUSD synthetic dollar on Aug. 14, 2026, citing unspecified circumstances affecting reserves. The protocol has not disclosed which asset or counterparty was involved, whether reserves incurred a realized loss, or when operations will resume.

Neutrl also paused other protocol functions on legal advice. The suspension prevents approved counterparties from exchanging NUSD for backing assets. Approximately $53.6 million in NUSD tokens are currently in circulation.

Yield protocol Strata subsequently paused minting and redemptions for contracts within its Neutrl market, which supports NUSD-linked products. Strata confirmed its other markets remained operational.

NUSD is designed to maintain a dollar peg using yield-bearing crypto assets and market-neutral strategies rather than traditional bank deposits. As of Sept. 4, 2026, NUSD traded at about $0.9984, according to RWA.xyz.

A February assessment by risk-advisory firm BA Labs had flagged Neutrl integration as higher risk, citing counterparty, operational and liquidity concerns. BA Labs noted that direct NUSD redemptions were restricted to KYC or KYB-approved counterparties, and that redemption requests exceeding the protocol's liquid buffer could queue for completion within 48 hours without guarantee.

At the time of BA Labs' assessment, NUSD supply totaled $226 million with reserves of $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.

On-chain data shows NUSD's market cap fell 18.4 percent over 30 days to $53.6 million as of Sept. 4, 2026. Monthly transfer volume dropped 72.4 percent to $71.4 million. The earlier contraction does not establish a direct causal link to the current reserve issue.

Over the prior 30 days, NUSD recorded 615 holders and 347 active addresses. In May, verification platform Accountable stated its Neutrl dashboard provided continuous cryptographic proof that reserves matched liabilities.