The stablecoin Main Street USD (msUSD) lost its dollar peg on June 20 after Accountable, the firm that verified its reserves, terminated its service agreement. msUSD plunged roughly 71% in 24 hours to around $0.29, sinking its market value to about $30.5 million.
Why Accountable Walked Away
Accountable, which runs real-time proof-of-reserves checks and has verified over $1 billion in client assets, said Main Street could not meet its verification standards. The company stated it will hold that standard without exception. Accountable is backed by Pantera Capital and counts Galaxy and Amber Group among its clients.
The Domino Effect on msY and Morpho
That collapse didn't stop with msUSD. Staking the stablecoin minted msY, a yield token tied to options box spreads. msY lost 70% of its value too. On Morpho, a large decentralized lender, the msY/USDC market hit 100% utilization and borrow rates spiked to 138%. An AlphaUSDC vault holding roughly $18 million in exposure to that market is now underwater.
A Contract That Can Be Changed
GoPlus security scanner flagged that msUSD's smart contract is an upgradeable proxy. That means the contract owner can disable sells, mint new tokens, or change fees at any time. Main Street had marketed msUSD as always redeemable 1:1 for USDC and promoted an Accountable-powered public dashboard tracking collateral. That dashboard is now disabled.
Unresolved Questions
Analysts had previously questioned the risks of yield-bearing stablecoins. With msUSD trading at a fraction of a dollar and the verification gone, it's unclear how — or if — Main Street can stabilize the peg. The Morpho market's utilization remains maxed out, and no timeline has been given for restoring the public dashboard or finding a replacement verifier.
