There is a mystery about the USDK (USDK) stablecoin. USDK was CoinMarketCap’s 514th ranked cryptocurrency on 1 June 2023.
Yet, I can find little information about USDK online. In particular, there is no USDK website and no details about USDK’s assets are available. They claim USDK is a stablecoin that makes transactions with US Dollars. Yet there is no evidence USDK holds a single US dollar.
To elaborate, they do not publish any audits of USDK or say how or USDK holds dollars. Stablecoins do not contain fiat currency. Instead, stablecoin contains a smart contract that makes payment in fiat currency.
Reputable stablecoin operators publish reports of their holdings. For example, Tether’s Consolidated Reserves Report (CRR) states Tether Holdings held $53.045 billion in US Treasury Bills, $7.5 billion in overnight reserve repurchase agreements, $786.851 million in team reserve repurchase agreements, $7.453 billion in money market funds, $481. 351 million in cash & bank deposits, $47.681 million in non-US Treasury bills, $140.669 million in corporate bonds, $3.391 billion in precious metals, $1.5 billion in Bitcoin (BTC), and $5.349 billion in secured loans on March 31, 2023.
Does USDK Exist?
Hence, you can prove Tether Holdings had $81.833 billion in total assets on 31 March 2023. There is no such proof for USDK. Indeed, there is little evidence USDK exists on the internet.
All I could find to show USDK’s origins is a four-year-old press release that describes USDK as-a “US Dollar-pegged stablecoin co-launched by its strategic partner OKLink and Prime Trust.” They also call USDK an Ethereum Request for Comment (ERC-20) stablecoin. However, OKLink’s website does not mention USDK.
OKLink calls itself an “intelligent web3 data platform.” They claim OkLink’s primary product is a BTC explorer that supports 24 blockchains. Ironically, the only stablecoin OKLink mentions is Tether (USDT).
The press release states OKLink is associated with the OKEx cryptocurrency exchange. Notably, the only stablecoin I see mentioned at Okex’s website is once again, Tether. I have to wonder if USDK is dead or what.
Prime Trust is a Las Vegas company that builds financial infrastructure for crypto. Prime Trust products include financial service application programming interfaces (APIs) Prime Trust operates an API ecosystem that connects different blockchains and DeFi products.
Prime Trust’s website does not mention USDK (USDK). Like OkLink, the only stablecoin Prime Trust mentions is Tether (USDT).
What Value does USDK (USDK) offer?
Hence, the organizations that supposedly issue USDK do not seem to use it or mention it.
Conversely, CoinMarketCap gave USDK (USDK) a $1.0163 Coin Price, a $29.077 million Market Capitalization, a $29.077 million Fully Diluted Market Cap, and a 24-Hour Market Volume of $98 on 1 June 2023. They base those numbers on a Circulating Supply of 28.6 million USDK.
Thus, people appear to be investing in a stablecoin that my not exist. I think USDK shows why we need regulation of stablecoins. Somebody needs to check these instruments and verify the existence of the fiat currency they supposedly make payment in.
USDK shows why we need cryptocurrency regulation now
I think USDK justifies the US Securities and Exchange Commission’s (SEC) efforts to declare cryptocurrencies and stablecoins securities to regulate them.
USDK shows speculators need to do their research. In particular, you need to avoid any cryptocurrency for which you can find no background information. More importantly, you need to avoid any stablecoin that does not show evidence of its cash or reserves.
USDK shows how dangerous the stablecoin market has become. Smart speculators need to avoid any stablecoin that does not list its assets. Speculators need to be careful because USDK shows nothing could back some stablecoins.