Trader takes $4m short position on TrueUSD as issuer halts mints and redemptions

Following the issuer's determination to temporarily halt mints and redemptions done its banking partner, Prime Trust, a trader has taken vantage of the concern by initiating an on-chain abbreviated presumption connected the stablecoin TrueUSD (TUSD).

According to on-chain data, an Ethereum idiosyncratic utilized Aave's V2 lending level by depositing 7.5 cardinal USDC, a stablecoin, arsenic collateral. They past borrowed 4 cardinal TUSD, different stablecoin, and promptly sold it for USDC. This strategy of borrowing and instantly selling is often employed to found a abbreviated presumption connected a peculiar asset.

Earlier this month, the issuer of the stablecoin made an announcement regarding the suspension of caller TUSD minting done its custodial partner, Prime Trust, a spot institution based successful Las Vegas. Subsequently, the Financial Institutions Division (FID) of the Nevada Department of Business and Industry issued a cease-and-desist bid against Prime Trust.

In effect to the Prime Trust situation, the TrueUSD issuer clarified that it does not impact its operations concerning the conversion of fiat to stablecoin and vice versa. Through a statement, the issuer affirmed that they person nary vulnerability to Prime Trust and support aggregate USD rails for the minting and redemption of TrueUSD, arsenic stated successful a tweet.

The wallet infrastructure supplier and integer plus custodian BitGo antecedently signed a non-binding letter of intent to get the fintech infrastructure supplier Prime Trust, according to an announcement connected June 8. However, On June 22, BitGo announced connected Twitter that it had decided to cancel its acquisition of fintech infrastructure supplier Prime Trust.

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Following regulatory issues with its associated BUSD stablecoin, the adoption of TrueUSD (TUSD) by cryptocurrency exchange, Binance, led to a important summation successful its usage. The TUSD stablecoin experienced a surge successful popularity arsenic a result.

TUSD is the 5th largest stablecoin aft Tether USD (USDT), USD Coin (USDC), DAI, and BUSD, with a marketplace capitalization of conscionable implicit $3.1 billion, according to CoinGecko.

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