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Following TrustToken\u2019s decision to temporarily halt mints and redemptions of its TrueUSD (TUSD) stablecoin through its banking partner, Prime Trust, a trader has taken advantage of the situation by initiating an on-chain short position.<\/p>\n
According to on-chain data, an Ethereum user utilized<\/a> Aave\u2019s v2 lending platform to deposit 7.5 million USD Coin (USDC<\/a>) as collateral. They then borrowed 4 million TUSD and promptly sold it for USDC. This strategy of borrowing and immediately selling is frequently employed to establish a short position on a particular asset.<\/p>\n Earlier this month, the TrueUSD team announced the suspension of new TUSD minting<\/a> through its custodial partner, Prime Trust, a company based in Las Vegas, Nevada. Subsequently, the Financial Institutions Division of the Nevada Department of Business and Industry issued a cease-and-desist order<\/a>\u00a0against Prime Trust.<\/p>\n In response to the Prime Trust situation, the TrueUSD issuer clarified that it does not affect its operations concerning the conversion of fiat to stablecoin and vice versa. Through a statement, the issuer affirmed that it has no exposure to Prime Trust and maintains multiple United States dollar rails for the minting and redemption of TrueUSD, as stated<\/a> in a tweet.<\/p>\n The wallet infrastructure provider and digital asset custodian BitGo previously signed a non-binding letter<\/a> of intent to acquire Prime Trust, according to an announcement on June 8. However, On June 22, BitGo announced on Twitter that it had decided to cancel its acquisition<\/a> of Prime Trust.<\/p>\n Related: <\/em><\/strong>Circle and Sequoia were among top depositors at Silicon Valley Bank: Report<\/em><\/strong><\/a><\/p>\n Following legal action<\/a> by the New York Department of Financial Services and the U.S. Securities and Exchange Commission against<\/a> the Binance-branded Binance USD (BUSD<\/a>) stablecoin and its issuer, Paxos Trust, Binance replaced its BUSD holdings with TUSD, which led to a significant increase in its usage and popularity.<\/p>\n TUSD is the fifth-largest stablecoin after Tether (USDT<\/a>), USDC, Dai (DAI<\/a>) and BUSD, with a market capitalization of just over $3.1 billion, according<\/a> to CoinGecko.<\/p>\n Magazine: <\/em><\/strong>Yuan stablecoin team arrested<\/em><\/strong><\/a><\/p>\n<\/div>\n