Neutrl froze its NUSD synthetic dollar this week. The money had been leaving for six months.
On August 13 the protocol paused minting, redemptions, and its other functions after what it called unspecified circumstances affecting its reserves. It did not name the affected asset. It did not say whether a loss occurred, how large it was, or when the pause would lift. Neutrl said it acted on legal advice while it assesses the impact, which is the kind of sentence a lawyer writes and a token holder should read twice.
NUSD traded near $0.9984 through the freeze, a hair under its dollar target. The peg held. The supply is another matter.
Supply had already fallen 76% before the freeze
In February, NUSD had roughly $226 million in circulation. This week it sat near $53.6 million. That is a 76% contraction, and 18.4% of it came off in the past 30 days alone. Transfer volume over the same month dropped 72.4%, to $71.4 million. A synthetic dollar people trust does not shed three quarters of its float in half a year.
| Metric | February 2026 | This week |
|---|---|---|
| Circulating supply | $226 million | $53.6 million |
| Reserves (BA Labs review) | $233.7 million | not disclosed |
| Collateralization ratio | 103.6% | unknown |
| 30-day transfer volume | higher | $71.4 million |
| NUSD holders | not stated | 615 |
The February backing figure comes from a BA Labs review, which put reserves at $233.7 million against the $226 million supply, a collateralization ratio near 103.6%. More than 87% of that sat with one custodian, Fireblocks, and the rest on exchanges. The same review flagged the integration as higher risk for operational and counterparty exposure. That warning is five months old, and it reads like the concentration risk that turned one stolen key into a MiCA-licensed stablecoin's reserve problem earlier this year.
Most holders could not redeem anyway
NUSD had 615 holders and 347 active addresses over the past month. That is small. Redemptions were open only to KYC or KYB approved counterparties, so an ordinary wallet holding the token never had a direct line to the reserve to begin with. When Neutrl paused the mechanism, it shut a door most users could not walk through. It is a tighter version of the shortfall that left the CoinsBuy refund stopped at half, where the people owed money watched the recovery run dry before it reached them.
The backing was market-neutral crypto strategies, not deposits in a bank, which is the same design Resolv leaned on during its own 72-hour reserve scare. Strata, a yield protocol built on NUSD-linked contracts, paused its Neutrl market the same day and kept its other markets open. That is the path worth watching. Not the peg, which is steady, but the products stacked on a reserve nobody outside the team can currently see.
Neutrl has given no timeline. The $53.6 million still parked in NUSD is waiting on a number the protocol has not published, and until it names the asset and the size of the hit, that wait is the whole story.
