Justin Sun Moved $6M Stablecoins From TrueFi Lending Pools Before FTX-Alameda Bankruptcy

Bankrupt trading firm Alameda Research has $7.2 million in outstanding debt from a TrueFi credit facility.

AccessTimeIconNov 11, 2022 at 7:44 p.m. UTC
Updated Nov 11, 2022 at 9:00 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Justin Sun, founder of the Tron network and a one-time, potential savior of the insolvent crypto exchange FTX, moved $6.1 million in stablecoins from decentralized lending protocol TrueFi, which is among companies weighted down by FTX sister company Alameda Research's debts.

Transaction data on the blockchain shows that Sun withdrew the funds in four transactions processed Thursday. He moved $2.4 million of USDT, 2.1 million of USDC, $1 million TUSD and $673,000 in BUSD from the four available credit pools on the lending protocol.

Justin Sun withdrew funds from TrueFi pools Thursday, according to blockchain data. (Arkham Intelligence)
Justin Sun withdrew funds from TrueFi pools Thursday, according to blockchain data. (Arkham Intelligence)

The crypto wallet has been identified as Sun’s by crypto intelligence platforms Arkham Intelligence and Nansen.

Justin Sun and representatives of TrueFi had not replied to requests for comment at the time of publication.

TrueFi is a decentralized lending protocol where liquidity providers can lend money for a yield, and borrowers can take out loans for interest. The loans are uncollateralized, meaning that creditors do not pledge assets against it. Borrowers secure the loan with only their good financial standing and trust.

The withdrawals are another sign of an ongoing liquidity crunch in crypto credit markets following the sudden implosion of FTX and Alameda Research, a trading firm.

Alameda Research has a $7.3 million outstanding debt on TrueFi’s Capital Markets credit facility, managed by TrueTrading. Alameda’s bad debt represents almost half of all current outstanding loans on the protocol, according to TrueFi’s dashboard. After Alameda filed for bankruptcy protection Friday, chances are low that it will be able to repay the loan.

TrueFi has already been rocked by two recent loan defaults. South Korea-based Blockwater defaulted on a $3 million debt despite restructuring efforts, and Invictus Capital didn’t pay back a $1 million loan by the maturity date after it filed for court-assisted liquidation earlier this year.

The total value locked on TrueFi cratered to $32 million from $544 million in the last six months as appetite for crypto borrowing dwindled, according to decentralized finance data site DefiLlama.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Krisztian  Sandor

Krisztian Sandor is a reporter on the U.S. markets team focusing on stablecoins and institutional investment. He holds BTC and ETH.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.