Justin Sun Movement of Assets across Chains might Trigger Stablecoins Depegging

It’s more likely that Justin simply withdrew $200M that he was Liquidity Providing versus borrowed the funds, as the JustLend dashboard shows only $6M borrowings.

Seems to be a pattern that he’d rather redeem USDC than USDT. Justin Borrowed 200M USDT from JustLend which he later collateralized via TRX, Sent 200M USDT to Binance, Chain swapped to ETH and withdrew, Swapped to USDC on 1inch, Cashed out 100m USD.

On chain analysis indicates, Justin Sun paid ~$15k+ in slippage to swap and cash out $100M via USDC/Circle instead of simply redeeming via Tether on Tron.

  1. Register for next Tekedia Mini-MBA (Feb 6 – May 6 2023) by clicking here. Discounted price is N60,000 or $140 by Jan 2, 2023. Price goes up afterwards.
  2. Explore Tekedia Learner-Managed Investment Fund and Portfolio Management program here and enroll; class begins March 6, 2023.

Besides the fees, this entailed multiple transfers, a CEX deposit, and a chain swap. Not sure why he went through the hassle. Seen quite a few of these where he dumps big bags of USDT in defi pools and sends USDC to Circle, on ETH at least— haven’t checked if he redeems Tron USDT.

Justin Sun used a token that he controls as collateral for the basis of this loan. How many other loans does he have set up like this? This sounds awfully familiar. This certainly could not have any negative consequences, I guess when you are really rich you just make your own blockchain, your own lending protocols, the whole infrastructure, then you become the main user.

Apparently, 110k $APE ($390k) was sent to Binance six days ago. Address 0x5d844a received 104k $APE 7 months ago and has been using them for staking for the last weeks, six days ago he transferred all available $APE to Binance via an intermediate address.

Address 0xbb2265 withdrawn 161k $APE ($576k) from the staking smart contract. Afterwards, these coins were transferred to giant whale address 0x307412, Its total wealth is $129M, of which $77M is held in ERC20 tokens. 4.5M $APE ($16M) has been transferred from address 0xf16bf1 to 0x3FD358.

26 days ago this 4.5M $APE was transferred from APE Treasury Wallet and has been moving from wallet to wallet for the past weeks. Justin has deposited/redeemed 62 times to Circle (USDC) for billions of dollars, while has just 5 withdrawals to Bitfinex/Tether.

It could simply come down to economics- USDC redeems could be cheaper than USDT redeems for Justin, and thus worth the additional steps/hassle + slippage. It would cost Justin $1K in fees to redeem that much via Tether. He is paying more in fees because he knows Tether doesn’t have the fiat for redemption.

Here’s a question to see if you have good faith answering: Why is USDT treated differently than other stablecoins at FTX? Why USDT doesn’t redeem 1:1.

Brett Harrison, who previously works with Bankrupt FTX said;

they’re different because there are fees to create/redeem USDT, while there are no fees to create/redeem the others (including at large sizes).

Wonder if this dynamic is the reason why USDT market cap has held up so strongly and why tether hasn’t really been seriously tested by redemptions. So long as USDT is near peg, it’s cheaper for people to swap to USDC/other stables, versus pay the 0.1% to redeem.

Federal-reserve will learn from here how to inflate, populate CBDCs and yet it’s legal across all stakeholders. The fact you can leverage loans against literal shitcoins is baffling to me, imagine willingly being on the other end of that loan.


Be the first to comment

Leave a Reply

Your email address will not be published.


*