Decentralized finance protocol Neutrl suspended minting and redemptions for NUSD on Thursday, citing unspecified circumstances affecting protocol reserves. The protocol paused all other functions on legal advice while assessing the impact but has not disclosed the affected asset, counterparty, or whether reserves suffered a realized loss.
With $53.6 million in NUSD in circulation, the suspension prevents approved counterparties from exchanging the token for backing assets, effectively breaking the primary mechanism maintaining NUSD's peg to the U.S. dollar. Neutrl did not provide a timeline for resuming operations.
Structured-yield protocol Strata paused minting, redemptions and related functions for contracts within its Neutrl market, which supports several NUSD-linked products. Strata clarified its other markets remain operational.
NUSD's market cap stood at $53.6 million on Friday, down 18.4 percent over 30 days, according to RWA.xyz data. Monthly transfer volume fell 72.4 percent to $71.4 million. The token traded at approximately $0.9984.
Over the past 30 days, NUSD recorded 615 holders and 347 active addresses. The synthetic dollar is designed to track the U.S. dollar through yield-bearing crypto assets and market-neutral strategies rather than bank deposits backing.
Verification platform Accountable stated on May 25 that its Neutrl dashboard provided continuous cryptographic proof that NUSD reserves matched protocol liabilities.
A February assessment by risk-advisory team BA Labs had classified a proposed Neutrl integration as higher risk, citing counterparty, operational and liquidity exposure. Direct redemptions were limited to KYC or KYB-approved counterparties, with requests exceeding the liquid buffer entering a queue targeted for 48-hour completion without guarantee.
At the time of BA Labs' February assessment, NUSD supply was estimated at $226 million with reserves at $233.7 million, implying 103.6 percent collateralization. More than 87 percent of reserves were held through Fireblocks, with smaller amounts on centralized exchanges.
