Trader takes $4M brief place on TrueUSD as issuer halts mints and redemptions

8:37 am
June 24, 2023
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Following TrustToken’s determination to quickly halt mints and redemptions of its TrueUSD (TUSD) stablecoin thru its banking companion, Prime Trust, a dealer has taken good thing about the location through starting up an on-chain brief place.

According to on-chain information, an Ethereum consumer utilized Aave’s v2 lending platform to deposit 7.5 million USD Coin (USDC) as collateral. They then borrowed 4 million TUSD and promptly offered it for USDC. This means of borrowing and instantly promoting is ceaselessly hired to ascertain a brief place on a selected asset.

Earlier this month, the TrueUSD workforce introduced the suspension of latest TUSD minting thru its custodial companion, Prime Trust, an organization primarily based in Las Vegas, Nevada. Subsequently, the Financial Institutions Division of the Nevada Department of Business and Industry issued a cease-and-desist order towards Prime Trust.

In reaction to the Prime Trust scenario, the TrueUSD issuer clarified that it does now not have an effect on its operations in regards to the conversion of fiat to stablecoin and vice versa. Through a commentary, the issuer affirmed that it has no publicity to Prime Trust and maintains a couple of United States buck rails for the minting and redemption of TrueUSD, as stated in a tweet.

The {wallet} infrastructure supplier and virtual asset custodian BitGo prior to now signed a non-binding letter of intent to obtain Prime Trust, in keeping with a statement on June 8. However, On June 22, BitGo introduced on Twitter that it had determined to cancel its acquisition of Prime Trust.

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Following prison motion through the New York Department of Financial Services and the U.S. Securities and Exchange Commission towards the Binance-branded Binance USD (BUSD) stablecoin and its issuer, Paxos Trust, Binance changed its BUSD holdings with TUSD, which resulted in an important build up in its utilization and recognition.

TUSD is the fifth-largest stablecoin after Tether (USDT), USDC, Dai (DAI) and BUSD, with a marketplace capitalization of simply over $3.1 billion, according to CoinGecko.

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