An Ethereum user took a $4 million short position on the stablecoin TrueUSD (TUSD) after the issuer temporarily halted mints and redemptions through its banking partner Prime Trust. The trader used Aave’s V2 lending platform by depositing 7.5 million USDC as collateral and borrowed 4 million TUSD, which was promptly sold for USDC to establish a short position on the stablecoin.
TrueUSD’s issuer clarified that the situation with Prime Trust does not affect its operations concerning the conversion of fiat to stablecoin and vice versa, and they have no exposure to Prime Trust. BitGo had previously signed a non-binding letter of intent to acquire Prime Trust but later cancelled the acquisition.
The adoption of TrueUSD by cryptocurrency exchange Binance led to a surge in its usage, making it the fifth largest stablecoin with a market capitalization of just over $3.1 billion according to CoinGecko.