Short Position Created on TrueUSD (TUSD)

Following the issuer’s choice to pause minting and redemptions through its banking partner, Prime Trust, a trader has taken advantage of the circumstance by starting an on-chain short position on the stablecoin TrueUSD (TUSD).

According to blockchain information, someone used the Aave V2 loan system to put 7.5 million USDC, a stablecoin, as security. They then borrowed 4 million TUSD, another stablecoin, and immediately exchanged it for USDC. This method of borrowing and quickly selling is often utilized to create a short position in a particular asset.

Earlier this month, the issuer of the stablecoin declared a stoppage of minting new TUSD through its custodial partner, Prime Trust, a trust company located in Las Vegas. Following this, the Nevada Department of Business and Industry’s Financial Institutions Division issued a cease-and-desist order to Prime Trust.

In reaction to the Prime Trust circumstance, the issuer of TrueUSD made it clear that it does not impact its activities concerning the exchange of fiat to stablecoin and the reverse. Through a declaration, they confirmed that they have no affiliation to Prime Trust and maintain multiple USD rails for the minting and redemption of TrueUSD, as declared in a tweet.

BitGo Calls Off Acquisition of Prime Trust

BitGo, a wallet infrastructure provider and digital asset custodian, had previously announced on June 8 that they had signed a non-binding letter of intent to acquire the fintech infrastructure provider Prime Trust. Yet, on June 22, BitGo declared on Twitter that they had decided to call off the acquisition of Prime Trust.

Circle and Sequoia were reportedly among the leading depositors at Silicon Valley Bank, according to a report.

Due to regulatory issues with its BUSD stablecoin, the usage of TrueUSD (TUSD) saw a dramatic rise after it was adopted by the cryptocurrency exchange Binance. This caused the TUSD stablecoin to gain considerable attention.

TUSD ranks fifth among the most significant stablecoins, with Tether USD (USDT), USD Coin (USDC), DAI, and BUSD being the top four. Its market capitalization is approximately $3.1 billion, as reported by CoinGecko.

The team behind the Yuan-backed stablecoin has been arrested.

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