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THORChain Strategically Aims to Fix $200M Debt with Tokens After BTC, ETH Lending Halt

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  • THORChain launches TCY token to convert $200M debt into equity with perpetual dividends.
  • RUNE drops 35%, falling from $2 to $1.3 after restructuring announcement.
  • $5M treasury grant funds TCY/RUNE liquidity pool to support token stability.

THORChain is currently undergoing a restructuring after facing a $200 million debt crisis due to ongoing financial challenges. In an effort to resolve the financial challenge, the decentralized liquidity protocol has introduced a new token—TCY (Thorchain Yield)—through a 90-day restructuring plan.

The token aims to convert nearly $200 million in unserviceable debt into equity and will pay dividends “in perpetuity” to its holders. The proposal was presented to the THORChain community with the goal of converting the debt into tokens.

THORchain Project and Debt Revamp Model

TCY tokens will be allocated at a rate of 1 TCY per dollar of previous outstanding debt, transforming lenders and savers into stakeholders. It is said to create an RUNE/TCY liquidity pool with an initial funding of $500,000, setting the starting price at $0.1 per TCY. This would be backed by a $5 million grant from the treasury, ensuring liquidity and stability for the newly issued tokens. A 10% earning power would be given indefinitely to token holders to provide them with long-term incentives for those affected by the debt.

RUNE Sinks 35% After Debt Restructuring Reveal

Although the government approved of the new financial strategy, RUNE’s value tumbled 35% within seven days, sliding from $2 to $1.3. The asset has depreciated over 70% in the previous month, which could be as a result of the widespread losses across altcoins.

Credit: Trading View
THORChain Strategically Aims to Fix $200M Debt with Tokens After BTC, ETH Lending Halt 2

THORChain’s system, however, still remains operational, facilitating over $270 million in swaps over the past day. The restructuring initiative aims to address economic hurdles while ensuring seamless functionality. RUNE experienced a nearly 50% drop in the last month, briefly slipping under $2 before recovering above 10%. Other key points about the project to take into cognisance are:

  1. To ensure Liquidity, $5million from the treasury has been allocated
  2. The creation of TCY/RUNE liquidity pool is essential for TCY market sustainability
  3. Effective revenue sharing models are key to maintaining stakeholder confidence.

Related Reading | MANTRA Explodes 23% Amidst Market Crash

India Strategically Reconsiders Crypto Policy Amid U.S. Pro-Crypto Influence

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  • India’s Reassessment of Crypto Regulations in Response to Global Trends
  • Economic Secretary Ajay Seth on India’s Changing Crypto Stance

India reconsiders its approach to cryptocurrency regulations as global perspectives shift, particularly influenced by the United States’ growing support for digital assets under Donald Trump’s administration. 

The increasing global acceptance of digital assets, along with the U.S.’s efforts to integrate digital currencies into its financial system, is pushing India to reconsider its rigid approach. With multiple countries easing restrictions and recognizing the economic potential of digital asset, India is beginning to acknowledge that an isolated stance may not be sustainable in the long run.

India Revisits Crypto Regulations

India’s Economic Secretary Ajay said in an interview with Reuters “more than one or two jurisdictions have changed their stance towards cryptocurrency in terms of the usage, their acceptance, where they see the importance of crypto assets. In that stride, we are having a look at the discussion paper once again,”. 

In December 2023, India’s Financial Intelligence Unit (FIU) took action against international cryptocurrency exchanges, and all digital assets related companies including Binance and Kucoin, issuing show-cause notices due to their failure to adhere to local digital assets regulations. 

Even if this is just a reassessment, it’s also important to take note of the recently passed law, as India’s 2025 Budget  introduces stricter tax measures on digital assets. The India Finance Minister, Nirmala Sitharaman, introduced the tax policy during the Union Budget 2025, placing digital asset earnings under undisclosed revenue per Section 158B of the Income Tax Act. Effective from February 1, 2025, the revision may impose penalties reaching 70% on unreported crypto-related profits from previous fiscal periods.

According to the details of the budget, every related digital assets activity are now recorded as virtual assets and would face increased taxation if it’s not properly recorded as income. Hence, exchanges, intermediaries, and other designated entities must submit transaction details to the income-tax authorities. 

There are many uncertainties that lies within India’s approach to digital assets. While authorities acknowledge the rising significance of virtual currencies and aim to stay competitive as nations adopt blockchain, they also enforce strict levies and favor central bank digital currencies over decentralized finance.

The main hurdle lies in balancing oversight with progress. Excessive taxation and rigid controls might drive crypto enterprises away, yet completely prohibiting the digital assets ecosystem seems less feasible in an interconnected global market.

Related Reading |  Coinbase Obtains FCA Approval to Revolutionize UK Crypto Market