TUSD Under Scrutiny: How to Short TrueUSD?

Table of Contents

Join our community

Estimated reading time: 0 minutes

TUSD Under Scrutiny: How to Short TrueUSD?

TrueUSD (TUSD) stablecoin, the fifth largest with a market capitalization of over $3.1 billion, has raised concerns about its state and reliability. With more FUD in the mix, we’ll examine potential hedging from a de-pegging event and DeFi options.

Prime Trust and Nevada Investigation

Bitco, a cryptocurrency custodian, planned to acquire Prime Trust, which partners with TUSD. However, Bitco announced it will not acquire Prime Trust, which reportedly experienced customer fund shortfalls prompting a Nevada regulator investigation. TUSD’s issuer claims Prime Trust does not impact their operations, but the Nevada Financial Institutions Division issued a cease-and-desist order against Prime Trust.

Pausing All Deposits

Despite claims of no impact, the network paused all mints and redemptions, preventing customers from redeeming or minting TUSD. TrueUSD also emailed customers stating redemptions were suspended due to Prime Trust’s failure. This contrasts with their public claims of no exposure, leaving customers unable to use TUSD as intended.

Where to Short TrueUSD?

If you believe TUSD will decrease in value due to controversy, short selling the stablecoin may be considered. This involves borrowing TUSD and selling it, aiming to buy back at a lower price after its value drops. TrueUSD can be borrowed on Aave’s V2 lending platform and Compound. TUSD’s deposit and loan interest rates on Ethereum’s Aave V2 have significantly increased, with the deposit rate exceeding 9% and the loan rate exceeding 18%. Therefore, be aware that you will have to pay a higher interest rate to borrow the stablecoin in order to sell it for other stablecoins.

 

Crypto_Library_logo_512x512_svg

Disclaimer: Trading and investing in cryptocurrencies (also called digital or virtual currencies, altcoins) involves a substantial risk of loss and is not suitable for every investor. You are solely responsible for the risk and financial resources you use to trade crypto. The content on this website is primarily for informational purposes and does not constitute financial advice.

Are you ready to take your trading skills to the next level?

"Trade Like a PEPE" is the ultimate course that will transform you into a confident and profitable trader! 📈

🐸 Transform into a confident and profitable trader

📈 Master technical analysis, risk management, and market psychology to navigate the crypto markets like a pro.

🔍 Develop a proven trading plan and spot high-probability setups.

Safe your spot!